Is the Sonoma County Housing Market Crashing in 2025?

By Shawn Hermosillo

Shawn Hermosillo, founder of Hermosillo Real Estate Group (HRE), is a Sonoma County native with deep roots in the community and a passion for real estate.

Are you worried the housing market in Sonoma County might be on shaky ground? With constant headlines about dropping prices, cooling demand, and uncertainty in real estate, it’s easy to feel anxious about what’s really happening. If you’re thinking about buying, selling, or simply watching your home’s value, the question becomes: ‘Should I be concerned?’

The answer is no. Sonoma County isn’t crashing, and it’s not repeating the chaos of 2008. Instead, it’s moving into a more stable, balanced phase. Here’s what’s actually happening.

Prices are stabilizing, not crashing. Home values have softened slightly, but they’re far from collapsing. Many neighborhoods are holding steady thanks to limited inventory and strong long-term demand. While more price reductions are showing up, this reflects sellers aligning with realistic market expectations, not panic selling.

Inventory is tight, but demand is steady. Listings have increased compared to earlier this year, but overall inventory is still well below historical averages. That shortage has kept demand steady, especially for well-priced homes in popular areas like Healdsburg, Petaluma, and Santa Rosa. Buyers are still in the market, but they’re more selective, carefully choosing properties that are move-in ready and priced appropriately.

Interest rates are shifting the market balance. Higher mortgage rates compared to last year have cooled some buyer activity, but they haven’t stopped it. Instead, the market has become more balanced. Buyers now have more room to negotiate, while sellers must be more strategic. In this environment, both sides benefit from relying on experienced guidance to make smart decisions and close strong deals.

So, should you be concerned about the Sonoma County housing market? Not if you’re informed and strategic. This is not a market to fear; it’s one to understand.

Whether you’re buying, selling, or simply curious about your home’s current value, local data and insights are available. Reach out anytime at (707) 280-5040, shawn@hermosillogroup.com. I’d love to give you a clear, local perspective so you can make well-informed decisions.