By David Hargreaves
As we analyze Healdsburg’s real estate performance in 2024, a tale of two distinct markets emerges—one that could reshape buying patterns in 2025.
While Healdsburg saw a substantial 17% jump in new listings compared to 2023 (outpacing Sonoma County’s 11% increase), overall sales grew by just 1.2%—a stark contrast to the County’s robust 10.4% growth. However, this headline number masks a fascinating market divergence that tells a more nuanced story about Healdsburg’s real estate dynamics.
The sub-$2 million market demonstrated remarkable strength, with sales increasing 8% year-over-year and prices appreciating 7%—dramatically outperforming Sonoma County’s modest 0.6% price growth. This segment of the market continues to show resilience, driven by a combination of primary residents, second-home buyers and investors who see value in Healdsburg’s enduring appeal.
However, the luxury market (properties over $2 million in our analysis) painted a very different picture. Sales in this segment declined 17%, with prices dipping 1.2%, which is definitely worse than the County’s 0.7% decrease in sales. Properties in this range also spent 44% longer on the market, averaging 95 days to sell. Sales absorption, a key metric indicating the overall health of the market, shows that only 40% of new listings resulted in successful sales (conversely 60% never sold!).
That being said, this metric is also an indication of the degree to which sellers, and agents, are realistic about house values. In Healdsburg, this is further complicated by the fact that Mill District and Montage are creating a false narrative around dollar-per-square-foot values. No other house in the last two years in the city limits has come close to getting the eye watering $2000+ per square foot of those developments.
What makes Healdsburg’s market particularly unique is the continued dominance of non-primary residence purchases. In 2024, 61% of all purchases were for second homes or investment properties, with rural properties showing an even higher rate at 76%. This tracks with 2023 when 64% of properties were purchased as non-primary residences.
Interestingly, as with recent years, this trend isn’t driven solely by out-of-town buyers as many would have you believe. Thirty-one percent of non-owner-occupied homes were purchased by Healdsburg residents themselves, with San Francisco buyers accounting for just 13%. It just shows that if you live here, you believe in the long-term investment value of properties in Healdsburg. This has to be a good sign for people considering investing here.
The recent wildfires in Los Angeles, particularly affecting affluent areas like Pacific Palisades and Malibu, could further influence Healdsburg’s luxury market in 2025. Healdsburg’s combination of Wine Country living, strong community and overall lifestyle makes it an attractive alternative for these buyers looking to relocate or purchase an interim second home.
What This Means for Buyers and Sellers
For buyers, the market presents different opportunities depending on price point. In the sub-$2 million range, competition remains strong, suggesting the importance of being well-prepared with financing and moving quickly when the right property becomes available. The luxury segment, however, may offer more room for negotiation, particularly for rural properties.
One of the recent shifts we have seen is people placing an increasing preference for buying rural properties that are still within easy reach of the amenities of the City of Healdsburg. With the wine industry having a tough time, properties that do not have the liabilities associated with a large vineyard where a new owner may struggle to find a new buyer for the grapes are preferable. This trend is likely to be further accentuated as the challenges of insuring high-value homes in rural areas will only likely get worse.
When it comes to sellers, they need to adjust their strategies based on their property’s price point. Those selling in the sub-$2 million range can expect continued strong demand, though proper pricing remains crucial. The good news is that homes in good locations that are priced appropriately will continue to be in demand.
Luxury property owners should be particularly strategic about timing and pricing, as this segment has become more price-sensitive, although with the expected benefits of a pro-business change of administration, we could see more activity at the higher end.
That being said, buyers can afford to be choosy. An original 1950s farmhouse that needs a major renovation or a Tuscan-style vineyard property are not what people are typically looking for. Today’s buyers want turnkey properties; that demand may increase if the fires in L.A. have a knock effect on building costs in Sonoma County.
Looking Ahead
As we move into 2025, several factors could influence market dynamics. A strong stock market, tax cuts and a build-up of equity in real estate could help stabilize the high-end market. Lower interest rates, if they materialize as predicted, could drive increased activity across all segments.
However, the market’s unique characteristic—its high percentage of non-primary residence purchases—suggests it will continue to operate somewhat independently of traditional market forces. This could provide additional stability, particularly if economic uncertainty increases as election promises kick in.
Healdsburg’s appeal as both a primary and second-home destination continues to grow. While the market shows some fascinating divergences, its fundamentals remain strong, supported by both local and out-of-area investment. For those considering entering the market, understanding these nuanced dynamics will be crucial for making informed decisions in 2025.
Whether you’re a buyer or seller, these complex market forces have never been more important to navigate successfully.
David Hargreaves is a partner with bruingtonhargreaves / W Real Estate, bruingtonhargreaves.com.
