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Three Markets, One County, and a Tax Break That Feels Illegal
David Hargreaves
July 10, 2026
One number for the whole county is officially useless. We pulled June's MLS data apart by price tier and found three completely different markets hiding inside the median — one scrambling, one stalling, and one that just doubled its pace. That last one is where the San Francisco money is going.
Luxury sales over $3M jumped more than 50% as the top of the market went from stalled to sold.
A permanent federal tax break can hand active vacation-rental owners a five- or six-figure first-year deduction.
Healdsburg just landed America's No. 1 resort — and it says plenty about where demand is heading.
Pour something cold, find the patio, and let's get into it.
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Market Insight
Three Price Points, Three Very Different Markets
Everyone quotes one number for the Sonoma County market. We pulled the June MLS data apart by price tier, and the single number is hiding three completely different stories. Countywide, the market tightened: absorption — the share of listed homes that sell each month — rose from 27% to 33% year over year, inventory fell about 11%, and sellers now net 99% of their original list price, up from 97%. The median hit $785,000 in June, up 3.3%. But split it by price and the averages fall apart:
Under $1M — the scramble. Absorption jumped from 38% to 49% and inventory dropped 17%, yet the median slipped about 1% to roughly $710,000. Fierce demand, thin supply, and budgets capping how high prices can go.
$1M to $3M — priced up, sitting longer. The median rose about 3% to around $1.4 million, but days on market stretched from 50 to 57. The homes that sell are getting pricier while the tier as a whole slows.
Over $3M — the comeback. Luxury sales rose more than 50%, absorption nearly doubled from 4% to 8%, and June's high-end median printed near $6.9 million against $3.8 million a year ago. The tier went from stalled to selling.
Our take. Averages lie in a market this segmented, and the high end is the tell. San Francisco has slipped back into a feeding frenzy, with AI money bidding the city up faster than many buyers can stomach, and when people get priced out of the city they come north. A near-doubling in our over-$3 million pace is exactly the footprint you'd expect if that money has found its way to Wine Country, and we think it has. We can't prove it from the MLS alone, but we'd bet on it. Either way, knowing which of the three markets you're playing in is the whole game right now.
Real Estate News
The Airbnb Tax Break That Acts Like a Free Down Payment
Every week we a couple of Bay Area tech people call up wanting to buy a vacation rental. The reason: offset W2 income. The federal tax change Trump introduced last year is doing something that sounds made up: handing high earners a five- or six-figure deduction in the year they buy a vacation rental. The mechanism is bonus depreciation, now made permanent, and for the right buyer it can wipe out a big chunk of a W-2 tax bill. Better than that, they can do it every year!
Here's the , minus the hype:
Take a 3-bed Healdsburg vacation rental bought for $1.25 million, with another $175,000 sunk into a pool and outdoor upgrade. A cost-segregation study on that property could reclassify roughly $300,000 to $450,000 into year-one write-offs under the 100% bonus depreciation the One Big Beautiful Bill Act brought back. At a 37% federal bracket, where most of the Bay Area W-2 earners running this play actually sit, that's $95,000 to $135,000 in immediate federal tax savings, with California savings stacked on top
It only works if you materially participate: think 500 hours a year running the property, or 100-plus hours and more than anyone else, with average guest stays of seven days or less. This is a business, not a mailbox check.
The sweet spot is earners between about $200,000 and $1 million. Below that, the bill isn't big enough to matter; well above it, the hours may not be worth the hassle.
The catch: it's a deferral, not a gift. Sell the property and the taxman wants it back — unless you 1031 into the next one or pass it to your heirs. And the IRS audits this hard, so the records have to be spotless.
Our take. The tax break is the cherry, not the cake. In Sonoma County the bigger variable is permits — our 2023 rules cap short-term rentals in whole zones, and permits don't transfer when a home sells. So the play is an already-permitted, cash-flowing property like the one that just came on at Vista Grande, not a coastal cottage you're hoping to license later.
Area Guide
The Sonoma County Areas Buyers Are Quietly Leaving
In March, more than a third of Sonoma County homes sold over asking. So why is a Sea Ranch cottage with an ocean view sitting 500-plus days at roughly half its original price? Because the county isn't one market — it's splitting, and our newest video maps exactly where buyers are going.
Cooling off:
The coast. After the fires and the COVID rush, reality set in: fog, hour-long grocery runs, and insurance. County premiums are up close to 40% over the decade, the steepest of any county in the nine-county Bay Area. In Sea Ranch, about 81% of homes sold below list.
Kenwood and Glen Ellen. Wildland insurance, collapsing vineyard values — roughly 30% of the 2025 grape harvest went unsold — and the novelty of being 25 minutes from a coffee shop wearing off. Kenwood posted the county's highest average days on market last year.
The Russian River. The 2023 vacation-rental ordinance means new permits are largely unavailable and don't transfer on sale, so the income-offset buyer who used to underwrite these homes has vanished.
Heating up:
Petaluma and Cotati. SMART train access, real walkable downtowns, days on market in the low 20s. Cotati is drawing nearly five offers per listing.
Sebastopol. The Barlow, cash buyers, and about half of listings selling above asking.
Forestville and Windsor. Same redwood-and-vineyard lifestyle, faster commutes, better value — Windsor's sub-$1M homes give you around 350 more square feet than Healdsburg's, at about 22% less per foot.
Our take. Buyers didn't leave the county. They reallocated toward value, space, and daily-life infrastructure. Watch the full breakdown before you fall for a 2022 price.
Lifestyle News
Sonoma Keeps Winning the Trophies. Napa Keeps the Traffic.
Appellation Healdsburg picked up a No. 1 resort award from Travel + Leisure this month — fine, awards are awards. The more interesting pattern is the one underneath it: the accolades keep landing on Sonoma's side of the county line.
The new resort: a 108-room, food-first property that opened last September where the Alexander, Dry Creek, and Russian River valleys meet, already booking out weddings and buyouts.
The Michelin news: last month's California guide handed Sonoma County a new three-star in Enclos and gave Healdsburg's Troubadour its first star — on top of SingleThread, which isn't going anywhere.
The scoreboard: Napa still has The French Laundry and the name recognition. Sonoma County has the momentum, the range, and, lately, the fresh trophies.
Our take. None of this is why someone buys a house here, but it's the drumbeat that puts the county on the shortlist. When the food-and-travel press keeps pointing at Sonoma County, more of its readers start pricing what it costs to live inside the postcard instead of just visiting it. That's the same demand feeding the over-$3M tier back in story one.
Real Estate News
Gray Divorce Is Rewriting Who Inherits the Family Home
Boomers are rethinking 'til death do us part' — and it's reshaping estates, retirement accounts, and who ends up with the house. Nationally, divorce among people over 65 has tripled since 1990 and doubled for those over 50, even as the overall divorce rate has fallen. Nearly 40% of divorces now involve someone over 50.
Why it lands here: a big share of Sonoma County sellers are long-tenured owners sitting on decades of equity. When a late-life split happens, that equity becomes the thing everyone has to divide.
The house is often the cleanest asset to split — but only if it's priced and timed right, not anchored to a number from three years ago.
The biggest asset is frequently the retirement account, not the home, which changes the math on who keeps what.
Estate plans don't update themselves. Beneficiaries on 401(k)s, trusts, and life insurance outrank the will — and stale ones send money to the wrong place.
Nationally, women see about a 45% drop in living standard after a gray divorce versus 21% for men, so getting educated on the full financial picture early matters.
Our take. This isn't a sad story, it's a planning story. If a separation is on the horizon, the home decision is usually the pivot everything else turns on — and it rewards moving deliberately, not reactively.
Local News
Our Airport Just Set a Record — and It's Still Building
Charles M. Schulz–Sonoma County Airport just had its busiest month since commercial flights returned 19 years ago: 86,500 passengers in May. Through the first five months of 2026, nearly 317,000 travelers passed through STS — up 3.5% year over year and almost double the same stretch of 2019. Southwest launched here in April, with more flights arriving in August and October. All that traffic is forcing a build-out:
The commercial apron — where planes park at the terminal — is being expanded and repaved, adding parking positions while the airport stays open throughout.
The project slipped after the original site for hauling away excavated soil stopped taking it, a very Sonoma County kind of delay.
The county is also weighing steps to address rising aircraft-noise concerns on the west side.
Why it matters for buyers. Easier direct access is one of the quiet engines of Sonoma County demand. Every new nonstop makes a second home or a full relocation from further afield more realistic — a tailwind for values, especially in Windsor and Santa Rosa, right in the airport corridor.
Lifestyle News
We Got New Headshots. We Skipped the Botox.
Apparently the going rate to look like a luxury real estate agent is now six figures a year. A national report on top-producing agents turned up standing quarterly Botox, five-figure wardrobe budgets, personal stylists, monthly facials, and designer shoes resoled one at a time — all filed under 'cost of doing business' in a Selling Sunset world. We just did new BruingtonHargreaves team photos.
For the record, here's what our glow-up budget covered:
Botox: none.
Stylist: also none.
Designer wardrobe: Jonathan owns one nice jacket, and it wasn't bought in Milan.
Good lighting and a photographer who's patient with us: worth every penny.
And yes, the question we get most isn't about Botox — it's whether we're related. For the record: do you see the family likeness between David and Jonathan? The answer is no. You wouldn't believe how many people are convinced we're father and son. We're choosing to take it as proof of a great team.
Our take. Presentation gets you in the room; performance keeps you there. Our clients hired us for results and a clear read on which of three markets they're actually buying in — not for a jawline. New photos are on the site, worn by the same faces that have sold $250 million of Sonoma County real estate over three years, wrinkles and all.
New Listings
On the Market This Week
New Listing — 3229 W Dry Creek Rd, Healdsburg $2,195,000
Just hit the market in Dry Creek Valley, and the weekend showing schedule is filling up fast — grab a slot before it's booked out.
Coming Soon — 7616 Hwy 128, Healdsburg · approx. $2.6M
Vineyard, pool, and nothing left to fix, right next door to Silver Oak. Available to show now — ask us for a private look before it lists.
Price Reduction — 10936 Eastside Rd, Healdsburg $2,350,000
The seller just took $150,000 off. A Healdsburg Eastside address that's suddenly worth a second look, with a motivated seller behind it.
Price Reduction — 16530 Laughlin Rd, Guerneville $1,495,000
First listed at $1.795M last year, now under $1.5M — that’s $300K off. If you haven't been out to Laughlin Rd yet, this is the moment: worth the drive to see for yourself.
3229 W Dry Creek Rd Healdsburg
What's Happening This Week
Where to Watch the World Cup Quarterfinals
Where: Churchill's Pub (Santa Rosa) · Barrel Brothers Brewing (Windsor) · Jimtown and Then Sum (Alexander Valley, Healdsburg)
When: Friday–Sunday, July 10–12, 2026 · check each venue for kickoff times
Why You Should Go: The World Cup is down to the last eight and the quarterfinals run all weekend. Three ways to do it right: Churchill's, a proper British pub in Santa Rosa that's shown international football for years; Barrel Brothers in Windsor, 39 self-pour taps and a short walk from the Town Green; and Jimtown and Then Sum out in Alexander Valley, where the Brit who reopened the old store pairs dim sum with an outdoor bar and TV. If England is still in it, you know where we'll be.
Where: Downtown Petaluma (Petaluma, CA)
When: Sunday, July 12, 2026
Why You Should Go: Art, gardens, and a stroll through the county's most walkable downtown — an easy Sunday if you're scouting the 101 corridor.
Where: The Barlow (Sebastopol, CA)
When: Wednesday, July 15, 2026 · Evening · Free
Why You Should Go: Free Wednesday-night music in the middle of Sebastopol's best food-and-drink block. Come hungry.
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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.