Napa Valley and

Sonoma Valley

Real Estate Market BI-ANNUAL REPORT

MEDIAN SALES PRICE

MEDIAN SALES PRICE PER SQUARE FOOT

The American Canyon market was

similar to the Napa market in that

the volume of sales decreased

slightly (3%) but prices continued

to rise by a healthy 5%. Days on

the market increased 91% to 86

days. The least expensive house to

sell was a 1,248 square foot home

on Creekside Circle which sold

for $210,000. On the other end of

the spectrum, a 49 acre parcel

with a 1,895 square foot home on

Jameson Canyon Road sold for

$775,000.

Statistics for a small

market like Yountville can

swing fairly dramatically

because there are a limited

number of transactions.

The number of sales in

Yountville dropped from

19 to 11, a decrease of

42%. Likewise, the median

sale price fell some 26%,

from just over $1 million to

$745,000. Perhaps more

telling is that the median

price per square foot rose

9% and the number of days

on the market decreased

41%.

The number of homes that sold

in Napa in the first half of 2016

was down 2% compared to this

period last year but prices have

continued to rise. The median

sales price of a home in Napa

rose about 10%. Although prices

rose, properties stayed on the

market 62% longer than in the

first half of 2015. Sales ranged

from $130,000 for a 1,200

square foot home in Steele

Canyon to $18,100,000 for the

late Robin Williams’ 20,000

square foot home on 639 acres

on Wall Road.

16 $599,000

15 $410,299

16 $430,000

15 $1,010,000

16 $745,000

15 $335

16 $364

15 $227

16 $234

15 $526

16 $576

15 498

16 489

15 73

16 71

15 19

16 11

15 45

16 73

15 45

16 86

15 134

16 79

NUMBER OF SALES

DAYS ON THE MARKET

The statistics provided were obtained from BAREIS Multiple Listing Service including defined areas, which may not include all sales.

NAPA

1775 LINCOLN AVENUE

(707) 258-5200

15 $539,000

NAPA—COMMERCIAL

1040 MAIN STREET

(707) 224-8454

What does Median

Mean?

The median is

the middle, so

in terms of sales

price, it is the sales

price that has an

Equal number of

higher-priced and

lower-priced sales

on either side of it.

MEDIAN SALES PRICE

MEDIAN SALES PRICE PER SQUARE FOOT

Calistoga stayed steady on

sales volume but saw a

slight decrease in prices.

The median sales price

dropped from $690,000 to

$630,000 and the average

time on the market

increased by 76%. Of the

32 properties that were

sold, 2 sold for more than

$6,000,000 and 10 sold for

$500,000 or less, including

several Calistoga Ranch

condominiums. The 206

acre Bella Vista Vineyard

property on Petrified

Forest Road received the

highest price paid at $8.5

million.

The Sonoma Valley, like the

Napa Valley, continues to have

less inventory than buyers.

The number of sales decreased

by 13% from the same period

last year but median sales price

increased by 8%. The average

days on the market increased

by 60%. About 17% of the

residences that changed hands

sold for $500,000 or less while

about 6% of the transactions

were for $2M or more, the

highest being a 3,855 square

foot home on slightly more

than 9 acres.

The St. Helena residential

market showed the strongest

growth in the Valley during

the first half of 2016. The

number of home sales was up

19% and the median sales

price rose from $875,000 to

$1,204,000. Likewise, the

median sales price per square

foot rose from $485 to $602.

Average time on the market

dropped slightly, from 99 to

96 days. Four homes sold for

more than $7,000,000 during

the period.

$373,000

$129

$167

15 53

16 63

15 31

16 32

15 257

16 223

15 99

16 96

15 81

16 143

15 40

15 64

NUMBER OF SALES

DAYS ON THE MARKET

The statistics provided were obtained from BAREIS Multiple Listing Service including defined areas, which may not include all sales.

SONOMA

800 BROADWAY

(707) 996-3232

$470,000

15 $690,000

16

15 $630,000

16 $679,000

SONOMA ~ PLAZA

34 WEST SPAIN STREET

(707) 996-3232

ST. HELENA

1289 MAIN STREET

(707) 963-1152

16

15 $875,000

$1,204,000

15 $485

16 $602

$630,000

15 $348

16 $309

15 $410

16 $404

What does Days on

the Market Mean?

Country Property

Napa Valley Sales of country property (homes on at least 1 acre)

stayed steady in volume, but the median sales price rose

10% when compared to the same period in 2015. These

results mirror the results in Napa residential sales, which

is not surprising considering that the vast majority of the

sales were in Napa. St. Helena had 46% more sales inthis

category than during the same period in 2015. Country

property sales by area broke down as follows: Napa 48,

Calistoga 12, St. Helena 15, Angwin 5, and Deer Park 1.

Sales ranged from $270,869 for a mobile home needing

“TLC” on 110 acres in the hills near Berryessa Highlands,

to $8,500,000 for the 206 acre Bella Vista Vineyards prop-

erty on Petrified Forest Road, which included a 4072

square foot main house with a pool, a guest house, 37

acres of vineyards and a private lake.

There also were 12 sales of raw land sold through MLS

during the first 6 months of 2016 ranging from $420,000

for 5.1 acres on Foster Road, to $1,550,000 for 10 acres

on Hagen Road.

Country Property

Sonoma Valley

82

$1,275,000

81 16 $1,400,000

15

44

$1,517,813

40 16

$1,397,500

15 The median sales price for Sonoma Valley country

property (homes on at least 1 acre) dipped 9%, from

$1,517,813 in the first half of 2015 to $1,397,500 in the

first half of 2016. The volume of sales also dropped about

8% year over year from 44 to 40 properties. Of the 40

properties that sold, 34 sold for $1,000,000 or more. The

least expensive property in the category was a 2-acre

property with a 2 bedroom, 1 bathroom home in Glen

Ellen that sold for $678,000. The most expensive property

that sold was a 4 bedroom, 4 bathroom home on a 9.6 acre

lot in Sonoma. That property sold for $4,200,000.

Million Dollar Plus Market

Napa Valley

The Million Dollar Plus Market continued to grow in the

first half of 2016. Sales units were up by 27%, from 97 to

123, and the median sales price was up moderately (4%)

when compared to the same period in 2015. The City of

Napa led the way with 65 million-dollar-plus sales during

the period, followed by St. Helena with 42, twice as many

as during the same period last year, Yountville with 3,

Angwin with 5, Calistoga with 7 and Oakville and Deer

Park with 1 each. Of the 124 sales, 60 closed between $1

million and $2 million, 12 between $2 and $3 million, 6

between $3 and $4 million, and 14 closed in excess of $4

million, the category with the biggest percentage increase.

11 properties sold for over $6 million, the highest being

the Wall Road estate of the late Robin Williams which

sold for $18,100,000.

Million Dollar Plus Market

Sonoma Valley

97

$1,500,000

124 16

$1,562,500

15

66

$1,457,000

63 16 $1,295,000

15

Sales of high end properties in the Sonoma Valley

slowed slightly compared to the same period in 2015.

The number of sales dropped slightly from 66 to 63.

Likewise, the median price of the properties that sold

dropped from $1,457,500 to $1,295,000, making this

the third year in a row that the median price has

dropped during the first half of the year. Of the 63

properties in this category, 49 properties sold between

$1 million and $2 million, 8 properties sold between $2

million and $3 million, and 6 properties sold between $3

million and $4 million. There were 2 properties sold for

over $4 million.

Commercial Property Generally, the local commercial real estate market is characterized by scarce

inventory in all sectors, for lease and for sale, with prices up due to demand

exceeding supply. The Napa County industrial vacancy rate is the lowest in 30

years, with the exception of a new 600,000 sq. ft. building near the airport,

rumored to be on the shortlist of a non-wine user that could bring 200+/- new jobs

to the Valley. For wineries, there’s plenty of demand and little or no supply of

temperature-controlled industrial space with docks. There’s nearly no vacant office

space downtown and a few 4,000 to 20,000 sq. ft. options available in the business

parks.

Housing is a much needed element for continued successful development of

downtown Napa to balance retail, office and hotel growth. In the planning stage is

a block-long project, replacing the former Napa Valley Register building, which

was severely damaged by the August 2014 earthquake. The new development will

provide 51 townhomes and 6,000 sq. ft. of commercial space. Another project, a

171 unit housing complex, within three miles of downtown Napa has been

approved. In its first 10 years, this project will operate as residential rentals, 101

one bedroom units and 70 with two bedrooms. Then, the properties will be

refurbished and sold as condominiums.

In Napa and Sonoma Counties, demand for multi-unit residential property is

strong as investors continue to net very low rates of return from banks. Also,

exchangers are reluctant to pay substantial capital gains. Rents keep rising due to

demand and residential rental inventory can’t meet the needs of consumers who

are unable or unwilling to buy homes. Along with traditional real estate investment

trusts (REITs), a new vehicle for raising capital has appeared, equity crowd

funding. As with any investment decision, these opportunities should be carefully

vetted by legal and tax advisors.

Up Valley, strong demand has pushed retail lease rates above $4 per sq. ft. in St.

Helena and over $2 per sq. ft. in Calistoga. Overall, the hospitality industry is

strong with new rooms coming available and existing properties selling for record

prices. Multi-family transactions have been tipping the scale at about $240,000

per door with cap rates about 5, depending on product quality. Office space is

limited and rents generally have remained stable at $2.50 to $3.75 per sq. ft. gross.

Spaces for lease are on market for an average of two months or less.

The City of American Canyon approved the proposed water supply for Montalcino

resort, a long-unrealized project in unincorporated south Napa County that has

been on the drawing board for years. Getting water from American Canyon

necessitates compliance with the city’s Zero Water Footprint Policy. Montalcino,

with hotel, spa and golf course, is expected to use

68 acre-feet of potable water per year or more than 61,000 gallons per day.

In Sonoma Valley, values on non-residential building permits have continued to

grow along with increased construction activity. New construction and extensive

remodeling of existing commercial buildings can be seen on Broadway, near the

Plaza, and on Sonoma Highway,

especially in the Springs.

Commercial property update and data for annualized lease rates were based on information obtained from Coldwell

Banker Commercial Brokers of the Valley, CoStar, and BAREIS.

INDUSTRIAL $14.00 to $18.00

RETAIL $43.00 to $58.00

OFFICE $33.00 to $46.00

INDUSTRIAL $ 9.00 to $9.60

RETAIL $14.00 to $53.00

OFFICE $21.00 to $39.00

Real Estate Money Report As a result of the Brexit decision, the 10-year US Treasury fell below 1.50% for the first time

since July 2012, while the Freddie Mac 30-year fixed mortgage fell to 3.41% which is the lowest

rate since May 2013. Freddie Mac believes that due to the Brexit vote and slowing growth in

China, mortgage rates should remain at historic lows for an extended period of time. As a result

of the recent global pressures, Freddie Mac revised the 30-year fixed rate mortgage forecast

down by 30 basis points for 2016 and by 50 basis points for 2017.

Mortgage interest rates ended lower in the first half of 2016, compared to the end of 2015.

According to Freddie Mac, the average interest rate for a conforming 30-year fixed mortgage

($417,000 and below) was 3.57% in June 2016, compared to 3.85% in December 2015.

Real Estate Money Report provided by Gene Ciabattari, Mortgage Solutions, Inc., he can be

contacted at 707.259.5272.