Relinquishing Profits NOT Value

Relinquishing Profits NOT Value

Our real estate markets have given back a portion of their vast gains over the last three years, but that is just a fraction – nine percent on average from May’s peak. Furthermore, testament to why real estate is noted as a play on long-term investing and why swings in pricing in the short term does not really erode the underlying value of this asset moving forward – provided you have a proper horizon in mind for when you are selling.

According to the most recent data collected by BAREIS MLS, a current overview of Sonoma County shows an average sold price per-square-foot (psf) of $536 being paid for a single-family home – one percent less than last year at this time though nine percent below the all-time peak noted just this May - indicating a slippage in property values already echoed by other metrics. The fall in value is iterated by the median price registering $824,000 at month’s end – six percent above November 2021 while five percent below May of this year.

Within the sub-markets of Sonoma County, Southwest Santa Rosa stunned broader markets with its’ 16 percent surge to $506psf while Oakmont and Windsor both laid claim to 11 percent advances registering average sold values for a single-family home of $440psf and $473psf, respectively. Punctuating the period with an eight percent rise, the tourist infused town of Sonoma along with the hamlets of Kenwood and Glen Ellen closed November at $781psf narrowly dismissing Cloverdale’s seven percent ascension to $412psf.

Remaining this side of positive, Cotati and Rohnert Park touted four percent improvements over a year earlier claiming sales at $434psf while Healdsburg eked a one percent gain to $730psf.

Retrenching past last year’s values, the Russian River region ceded two percent to close the period at $520psf marginally displacing Petaluma’s Eastside where the market surrendered three percent to close November at $442psf. Northeast Santa Rosa coughed-up four percent to $462psf with Southeast Santa Rosa peeling away nine percent to $432psf.

Wrapping up November, Petaluma’s Westside relinquished 11 percent to close the month at $559psf while Sebastopol gave back 18 percent with sales going out the door at $533psf. In the cellar this month, our venerable Coastline saw closing prices retreat 25 percent to $824psf.

Some have never taken a loss on real estate, by simply holding into perpetuity while only accumulating more. Others have had to realize losses due to being forced to sell for their particular circumstances at times unfriendly to their ownership period. That said, you only realize a profit or loss when a sale is completed, otherwise it is just what we call a paper gain or loss and often just more of a psychological phenomenon that impacts our emotional health and sense of financial worth. Plan ahead, act now and have a professional on your side.