Sonoma County faces a higher risk of a real estate downturn than almost any other housing market in the country, according to a study by one of the nation's top mortgage insurers.
Why?
Steve Cochrane, an analyst with Economy.com, a consulting company that tracks Sonoma County's economy, said he agrees there's a good chance that housing prices will decline. Higher interest rates would trigger a drop in demand and send real estate prices falling, he said.
"This rapid rate of price appreciation has to come to a halt eventually," Cochrane said.
Marco van Akkeren, a PMI economist, noted that income growth in Sonoma County has not kept pace with the explosion in home prices, which have doubled in five years - jumping 21 percent last year alone - and hit a record median of $609,000 in June.
"The cost is not sustainable in the long run," said van Akkeren. "A lot will depend on economic conditions, not just this year, but next year."
Maybe Sonoma will drift back to affordable over the next five years.
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