Rates Topped 7%. Buyers Signed 28% More Contracts Anyway

Author

David Hargreaves
October 09, 2026

Rates Topped 7%. Buyers Signed 28% More Contracts Anyway

Mortgage rates climbed to 7.40% this week and the 10-year Treasury hit its highest level since 2002. Sonoma County buyers didn't flinch, at least not in September: 499 homes went into contract, up 28% on last year.

  • An 83-day countdown to a six-figure federal write-off on a vacation rental, and why the permit, not the purchase, is the bottleneck

  • Sonoma County farms now feed 4 of California's 10 three-Michelin-star restaurants, one with up to 80 pounds of masa a week

  • A $100,000 price cut on a creekfront home, plus the $30 steak lunch behind Healdsburg's new top-10 ranking

Pour a glass for the patio and settle in.

Market Insight

Rates Topped 7%. Sonoma County Pending Sales Jumped 28% Anyway

September is supposed to be when buyers fade. Instead, with national mortgage rates crossing 7% for the first time since January 2025 (and hitting 7.40% this week), 499 Sonoma County homes went into contract in September. That's up 28% on September 2025, up 37% on August, and the busiest month for new contracts in the past 15.

Q3 by the numbers (vs Q3 2025):

  • Homes for sale: 1,161, down 9.7%, even though new listings rose 7.9%. Homes are getting bought, not piling up

  • Median sold price: $796,000, up 1.4%. Price per square foot: $572, up 6.6%

  • Sold to original list price: 96.0%, up from 94.3%. That's about $13,500 more for the seller of a median-priced home

  • Days on market: 59, down from 62

  • Closings: 1,133, down 6.6%, but pendings rose 4.7%, so the dip looks like timing, not weakness

Where the September surge came from:

  • $1M to $3M: 144 pendings versus 88 a year ago, up 64%. This is where Bay Area move-up and second-home buyers shop

  • Under $1M: 344 versus 293, up 17%. Still 71% of county sales, with absorption above 40%

  • By town: Santa Rosa 172 pendings (up 24%), Sebastopol 34 (up 62%)

At 32.6% absorption, Sonoma County is still a seller's market, just a slightly calmer one than in the spring.

Our take. Flat-looking prices are hiding a firmer market: buyers are paying more per foot and negotiating less. But we wouldn't read September as the start of a trend. Most of those contracts were signed before the latest rise in mortgage rates, and in the few weeks since, we've felt some of the air come out of the market. September's contracts should still lift October and November closings, but we expect new contracts in October to look quite different, especially under $1 million, where buyers rely most on financing. For now, treat September as a high point, not a new normal. We'll know more when October's numbers come in.

Real Estate News

The Six-Figure Tax Break With an 83-Day Fuse

Here is a deduction that only works if you beat the calendar. Buy a permitted vacation rental, run it the right way, and a big slice of the purchase can land on this year's federal return. The catch is that the house has to be placed in service by December 31. Not under contract. Not "almost ready." Permitted and open for bookings.

17785 Healdsburg Ave, Healdsburg

The deadline math:

  • Finding and closing on an eligible property: about 30 days, if you move quickly

  • Getting your Sonoma County permit, business license and TOT (transient occupancy tax) number: about 45 days

  • Days between today and December 31: 83

That leaves roughly a week of slack. Miss it and the benefit slides into 2027.

What's on the table:

A rental building is normally depreciated over 27.5 years. A cost segregation study reclassifies the parts that wear out faster, like flooring, appliances, landscaping and pools, into 5-, 7- and 15-year buckets. With 100% bonus depreciation restored under the One Big Beautiful Bill Act, those buckets can be written off in year one.

Here's how that could look on a home that's for sale right now. 17785 Healdsburg Ave is listed at $1.25 million and already runs as a licensed vacation rental:

  • Assume roughly $1 million of that price is depreciable building (land doesn't depreciate)

  • Standard depreciation: about $36,000 a year

  • With cost seg, 20 to 40% of that basis typically moves into faster buckets, for a first-year deduction of $200,000 to $400,000

  • In the 37% federal bracket, that's roughly $74,000 to $148,000 in federal tax savings

The real figures depend on the land value and what a study finds, but that's the scale of what's at stake.

The fine print: guests must average seven nights or fewer, and you must materially participate (usually 100+ hours a year, and more than anyone else, cleaner included) for the losses to offset your W-2 income. It's federal only, since California doesn't conform to bonus depreciation. We're realtors, not CPAs, so loop yours in early.

Two that can make the deadline:

  • 17785 Healdsburg Ave — $1,250,000. The home in the example above: a vacation-rental-eligible wine country escape not far from the Healdsburg Plaza, made for fireside evenings and bocce. A new owner still applies for the permit in their own name.

  • 2563 Mill Creek Rd — $1,400,000. Two en-suite bedrooms, a hot tub, cold plunge and sauna, and almost an acre of creekside seclusion west of town.

Market Insight

A $1.3M Town, an $850K Neighbor and the Spillover In Between

Ask almost any buyer about Healdsburg and someone mentions the 1,900-home cap. We went back through the city ordinance. It isn't there. What does exist is a voter-approved growth program that limits market-rate new homes to an average of about 30 allocations a year, and no more than 90 over any three years. Slow growth plus everyone wanting the Plaza lifestyle has pushed central Healdsburg into the low $1 millions to low $1.3 millions.

So buyers are spilling outward. In our latest video, we map exactly where they're going:

  • Windsor: recent closed sales in the mid-$800s, a working SMART station two blocks from the Town Green, and the 301-lot Quail Acres plan (approved, but construction hasn't started)

  • Midtown Healdsburg: the lanes and the streets north of Powell, where updated fixers on bigger lots are pushing toward $2 million

  • North Village: Enso Village and Appellation Healdsburg are open and more is filling in, but Parkland Farms' 118 units and the 53 apartments above the new promenade are income-restricted, not market rate

  • Geyserville and Asti: Dry Creek and Alexander Valley on your doorstep without Healdsburg prices, though the permanent Asti bridge still has no date

Our take. The spillover is real, but it isn't one move. Look hardest at homes that have sat 150+ days or already been repriced, and get insurance quotes during your inspection period: somewhere around 80 to 90% of county properties carry some wildfire risk over the next 30 years.

Lifestyle News

Amazon Knows Your Buttocks Are Flat. We Just Know You Want a Pool.

Amazon's new "About You" feature is the talk of the internet this week. Shoppers are seeing what the retail giant has worked out about them, and some of the findings are blunt.

Amazon launched the tool in May as part of a wider AI shopping push. It builds a profile from your purchases, searches, saved lists, reviews and chats with its Alexa for Shopping assistant. Some of the highlights shoppers have shared:

  • "Has flat buttocks"

  • "Has husband," and the husband "has skinny legs"

  • "Uses phone in the shower to read Kindle books"

  • "Has cats," then "treats cats as biological children," and only after that "has husband"

  • "Does not know what truffle is supposed to taste like"

Yes, these really are Amazon's own insights.

Here's where we come in. We're proud of how precisely we target buyers online for our listings. But our buyer profiles aren't quite at Amazon's level yet. Imagine if they were:

  • "Husband has skinny legs" → a home at the bottom of a serious hill climb, so the problem fixes itself

  • "Treats cats as biological children" → a home with a catio

  • "Owns noise-cancelling headphones, a white noise machine and earplugs" → five acres at the end of a private road

Maybe one day.

Until then, it's worth seeing what Amazon thinks of you. In the app, tap:

  • Account

  • Shopping preferences

  • About You

You can edit or delete anything you'd rather Amazon didn't use for your recommendations. And if your profile turns up a quirk of your own, send it our way. We'd love to find the Sonoma County home that suits it.

Local News

Sonoma County Farms Feed 4 of California's 10 Three-Michelin-Star Restaurants

California has exactly 10 restaurants with three Michelin stars, the guide's top honor. Two are in Sonoma County. Follow the produce back to the soil, though, and Sonoma County farms are feeding at least four of them, because Michelin's inspectors judge ingredient quality before anything else.

Tierra Vegetables, Santa Rosa

Who grows for whom:

  • Stone Edge Farm, Sonoma → Enclos. A 1-acre patchwork of pocket gardens delivers every Tuesday and Friday, and the kitchen sends its scraps back for compost. Enclos jumped from two stars to three in June, about 18 months after opening. Its summer tomato dish uses at least 20 heirloom varieties.

  • Tierra Vegetables, Santa Rosa → Californios, San Francisco. The James family has farmed since 1980 and sells the restaurant 60 to 80 pounds of masa a week, ground from heirloom corn that includes a black variety they spent 10 years breeding. Californios is now the first Mexican restaurant in the world with three stars.

  • Middleton Farm, Healdsburg → SingleThread, Quince and Troubadour. One farmer has worked its 8 acres near Mill Creek for more than 30 years, and the farm now supplies nearly a dozen Michelin-rated restaurants, Cyrus included. Troubadour earned its first star this summer.

  • SingleThread, Healdsburg, also grows most of its own produce.

The twist: wine grapes made up about 73% of Sonoma County's farm economy in the latest crop report ($626.6 million of $857.6 million). Yet the stars keep following the vegetable rows. Tierra's owners have said they could make more money growing grapes. They grow food instead, and have raised more than $100,000 from supporters to keep farming their 10 acres.

Our take. You don't need a tasting-menu reservation to eat from these fields. Troubadour's chef first found Middleton Farm at the Healdsburg Farmers Market, which runs Tuesdays and Saturdays. Same soil, much shorter wait list.

Lifestyle News

1 in 5 Homeowners Now Renovate With AI. 80% Still Call a Pro

Your next kitchen might be designed in a chat window before a contractor sets foot in it. A national survey of 3,149 renovating homeowners found 22% now use AI on their projects, and the split by age is stark:

  • Millennials: 41%

  • Gen X: 27%

  • Baby Boomers: 17%

  • Seniors: 7%

They mostly use it to gather ideas (64%), visualize concepts (58%) and compare options (50%). Only 24% use it to estimate costs, and 10% for permitting. AI users moved from idea to construction in about eight months, versus nine for everyone else.

The pros are further ahead: 41% of design and construction firms now use AI for everyday work, up from 34% a year ago. Renovation firms are drafting floor plans and mood boards straight from client emails, flagging when a selection blows the budget, and serving up several realistic renderings for every choice before anything is ordered.

The house is getting smarter too. Designers expect homes that:

  • Prep for a dinner party on a single voice command

  • Predict an appliance failure and book the repair

  • Spot unusual water flow and shut the water off before a leak becomes a flood

That last one is gold for second-home and vacation-rental owners who aren't on site. The top client worry is privacy, which is why some integrators now favour systems that keep voice requests off the cloud.

Our take. AI is sharpening the brief, not replacing the builder. Eyeing a fixer? Upload the listing photos, ask what the kitchen could become, and bring that to your contractor walk-through.

Area Guide

798,867 Votes Later, One Wine Country Town Cracked the Top 10

Healdsburg just placed No. 8 among the best small cities in the US in Condé Nast Traveler's 2026 Readers' Choice Awards, decided by 798,867 votes rating food, culture and architecture. Only one other California town made the top 10: Santa Barbara, at No. 5. Not bad for a town of about 11,000 people.

The top 10: Charleston, Alexandria, Santa Fe, Greenville, Santa Barbara, Lexington, Savannah, Healdsburg, San Juan and St. Augustine.

Why it keeps landing on these lists: places like Journeyman Meat Co., a butcher shop with a handful of tables on Center Street. It's the second act of Pete Seghesio, of the Seghesio wine family, and his son raises the Wagyu and Angus beef in the case.

  • The $30 steak lunch: a 5-ounce prime-or-better butcher's cut from the wood-fired oven, with garlic bread and a big pile of salad. Upgrade to anything in the case if something catches your eye

  • The $17 Estate Bacon Burger: born in the 2017 fires, when steak sales dried up and a case of prime beef had to be ground before it spoiled

  • The $17 BLT: Journeyman makes the bacon SingleThread serves, so this is a three-star ingredient on sourdough

  • The logistics: no reservations, open 11 a.m. to 7 p.m. Wednesday to Sunday and 10 a.m. to 5 p.m. Monday (limited menu), closed Tuesday

Fun footnote: the building next door that now houses SingleThread was originally meant to be Seghesio's sausage factory.

Our take. Rankings don't set prices, but they keep the demand coming for a town that deliberately builds slowly. If that has priced you out of the Plaza, our latest video maps where buyers are heading instead.

New Listings

A Year-Round Creek Just Got $100,000 Cheaper

14183 Chalk Hill Road, Healdsburg | 3 Bed, 3 Bath | 2,178 sq ft | 0.55 Acres

Water you can actually hear from the deck is one of the rarest things you can buy around Healdsburg, and this one just dropped from $1,295,000 to $1,195,000. That's a 7.7% cut, in line with the median 8.4% cut on $1 million-plus homes across Sonoma County last month, and it puts a creekfront home minutes from town under $1.2 million.

The house was taken back to the studs and rebuilt: newer cabinetry, slab countertops, new appliances, hardwood floors and fully redone bathrooms. The main house has two bedrooms and two baths, with decks looking out through the oaks to the creek.

Attached but fully separate is a one-bed, one-bath guest suite with its own private living space. Use it for visiting family, a home office you can actually close the door on, or rental income. It works as a full-time home, a weekend place or a multigenerational setup without anyone stepping on anyone's toes.

What actually sets it apart:

  • A year-round creek, not a creek bed that runs dry by July

  • Fire-resistant metal siding, a smart detail in Wine Country

  • A fully functional interior elevator, so stairs never decide when it's time to move

  • Separate guest quarters that can house family or help pay the mortgage

At $1,195,000, the creek's still free. See the photos and book a showing before someone else hears it first.

New Listings

On the Market This Week

See every BruingtonHargreaves listing → https://www.modernlivingsonoma.com/current-listings/

What's Happening This Week

Where: Sonoma County Event Center at the Fairgrounds, 1350 Bennett Valley Rd. (Santa Rosa, CA)

When: Saturday, October 10, 2026 • 6–9 p.m. • $100 plus fees, with food, wine and parking included

Why You Should Go: More than 100 award-winning wineries and 25-plus local food vendors in one room, with the sweepstakes winners announced live. Dress up: the Best Dressed prize is a luxury stay in Mexico.

Where: The Gables Wine Country Inn, 4257 Petaluma Hill Rd. (Santa Rosa, CA)

When: Saturday, October 10, 2026 • 1–4 p.m. • $150 per person

Why You Should Go: Shoes off, pants rolled, feet in the barrel. Wine, seasonal bites and a chance to saber a bottle of bubbly. Spots are limited.

Where: Bacchus Landing, 14210 Bacchus Landing Way (Healdsburg, CA)

When: Sunday, October 11, 2026 • VIP noon–1 p.m., general admission 1–4 p.m. • Tickets at healdsburgcrush.com

Why You Should Go: Pinot Noir, Chardonnay and sparkling from more than 60 California producers in one walk-around tasting, and 100% of net proceeds go to Boys & Girls Clubs of Sonoma-Marin. 21 and over only.

Share The Love

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  • Follow our somewhat professional adventures on Instagram @bruingtonhargreaves

  • Check our YouTube channel for weekly local market updates (and occasional winery mishaps)

David & Jonathan here – the guys who write about real estate but really just want to talk about our favorite taco trucks. Hit us up about anything Sonoma County (or beyond). Whether you're buying, selling, or just want to know which wineries actually welcome dogs – we've got you covered.