Sonoma County Real Estate Market: 2023 Update & 2024 Outlook

The real estate market in Sonoma County, California cooled down during 2022 but now appears to be heating back up again. Home prices are rising, and buyers are once more competing for limited inventory.

As a Bay Area mortgage company, we do our best to keep local home buyers and homeowners informed about current market conditions. We regularly publish real estate market reports that include detailed insight and analysis.

Today we turn our sights on Wine Country, with a summer 2023 housing market update for Sonoma County, California plus an outlook for 2024.

Sonoma County Housing Market Update for 2023

Like many real estate markets across the country, Sonoma County has experienced some wild swings over the past few years. The COVID pandemic had a lot to do with this.

Starting in 2020, California Wine Country regions like Sonoma and Napa experienced a surge in home-buying activity. This reduced supply levels all across the region and sent home prices soaring.

But by 2022, the Sonoma real estate market had cooled down considerably, like the rest of California. Rising mortgage rates caused home buyers to pull back, resulting in slower sales and an eventual decline in home prices.

That brings us up to the present.

When this report was published, in August 2023, the Sonoma County real estate market was heating back up again. That’s partly due to a decline in inventory since the start of this year. The short version is that home buyers across Sonoma County once again find themselves competing for very limited inventory.

Homes are currently selling more quickly than they were at the start of the year, with multiple-offer scenarios making a comeback as well. We’re not seeing the kind of frenzied housing market conditions that occurred during the pandemic. But the Sonoma County housing market has clearly accelerated over the past six or seven months.

Anyone planning to buy a home in Sonoma County during the rest of 2023 or in 2024 should pay close attention to these trends. They could make a strong case for buying a home sooner rather than later, to avoid higher housing costs down the road.

Home Prices Have Rebounded

Home prices across Sonoma County have risen steadily for many years, with one exception. The median home value for the county declined during the second half of 2022, as part of the nationwide real estate cooling trend mentioned previously.

A quick summary to catch you up: Sonoma County home values skyrocketed during the pandemic years, peaked at around $809,000 in the summer of 2022, and then fell to a “floor” of around $773,000 by February 2023.

According to Zillow, home prices within Sonoma County have risen for the past five months in a row. So it seems that the bottom of the post-pandemic downturn might be behind us, with the possibility of a long period of sustained price growth ahead.

Inventory Remains Tight in Wine Country

You can’t talk about real estate market conditions without discussing supply. After all, supply and demand are the two primary forces that influence housing markets and home prices.

Within Sonoma County, housing market inventory levels bottomed out at around a 1-month supply toward the end of 2021. That’s miles below what is considered to be a balanced real estate market, and it explains why prices were rising so fast back in 2021.

Inventory levels began to rise again in 2022 as the market cooled, getting back up to a 3-month supply by the start of 2023. Supply levels have declined a bit since then and are currently hovering in the 2.5-month range.

In terms of supply, the Sonoma County housing market is not as tight as it was during the pandemic, when buyers were snatching up properties right and left. But supply levels are still running low from a historical perspective.

This is another trend to be aware of, if you’re planning to buy a home in Sonoma later this year or in 2024. There are homes out there to be found — but it might take you a while to find the right one within your budget. Our advice is to start house hunting sooner rather than later and to bring plenty of patience.

A Faster Pace of Home Sales

When it comes to measuring the overall speed or pace of a particular real estate market, economists often use a metric known as the median days on market (DOM). This is the middle value for the length of time it takes for properties to sell, once they’re listed.

A lower median days on market suggests a faster-paced market where properties are selling relatively quickly.
A higher median indicates a slower market where properties take more time to sell.

Within the Sonoma County real estate market, the median number of “days on market” plummeted during the pandemic but rose again in 2022 as the market cooled. Since the start of 2023, the median DOM has declined in a more-or-less steady fashion.

In other words, the real estate market has accelerated since the start of this year.

As of late summer 2023, homes listed for sale across the Sonoma County real estate market spent a median of 30 days on the market before going under contract. That was on par with the national average for that same timeframe.

Sonoma Real Estate Market Outlook for 2024

No one can predict future housing market trends with complete accuracy. But we can make an educated guess based on current trends and conditions.

Through 2023 and into 2024, the most likely scenario is that Sonoma County home prices will continue rising at a moderate pace that reflects historical norms. House values probably won’t skyrocket again anytime soon, but they could creep upward at a steady pace.

This could create a sense of urgency among home buyers in Sonoma County. During a time of steadily rising prices, buyers who postpone their purchases end up paying a higher price.

Inventory will likely remain an issue for the foreseeable future, though we have made some gains since the all-time lows of recent years.

Need a mortgage loan? Bridgepoint Funding serves borrowers throughout the Wine Country region, including both Sonoma and Napa valleys. Our broker-based business model allows us to offer a wide range of home loan options, including conventional, FHA, VA and jumbo. Please contact our staff with any financing-related questions you have, or to apply for a home loan.