While no one knows the answer for sure, based on research I have done, I can say that I don’t think we will see much in the way of price changes in Sonoma County for the next few years.

Some people say that we will have another big drop in prices but I don’t expect it. These people reference the number of new foreclosures that will hit the market and that there will be a flood of them.

However, the banks don’t want to release a large number of properties all at once because it will devalue their inventory as well as devaluing the remaining properties they have loans against.

They saw what happened when the market was flooded with foreclosed properties in 2008 and don’t want to see a repeat of that.

In fact, at a recent meeting in Southern California with some of the bank executives from some large lenders, this exact discussion took place.

The bottom line is that the banks don’t want to lose money. This means that it is likely that they will release REOs into the market gradually. This could take years, which will result in prices not rising much, if any, for a few years.

The time table given at the meeting mentioned was five to 7 years to clear the entire inventory. Even if it doesn’t take that long, this plan will most likely prevent any huge increases or decreases in property values in most areas for several years.