Light on the Horizon Dust Settles During the Sonoma and Napa Winter 2021 If there is one thing we have learned over the last several years, it is that wine country is resilient. Wildfires, economic uncertainty, politics and a worldwide pandemic have all conspired to shake our core, especially in 2020. But here we are, […]... Read more
Wine Country Values 2019
It’s that time of year again when the sun comes out, flowers are in bloom, the grass is still green and the vines have made it through frost season. It is also that time of year when thoughts turn to finding your wine country dream property. Fortunately, this year there seems to be more inventory than the last several years.
We are currently observing vineyard estates, luxury homes and vineyards come on the market for various reasons beyond the typical Spring selling season. Locally, multiple high-profile Silicon Valley IPOs are going public and sellers are hoping to capitalize on newly minted millionaires. Another factor driving the market is the abundant harvest of 2018 that is putting pricing pressure on wine grape prices. We’ve been here before and don’t anticipate drastic moves either way in the near future. The solid underpinning of the world-class Sonoma and Napa wine grape growing regions include: scarcity of quality land and vineyards, natural beauty, premium lifestyle amenities, near perfect weather and close proximity San Francisco, Silicon Valley and the East Bay. For these reasons and more, wine country is still in demand.
So how do you value a vineyard estate property?
I will start by saying, take any online estimates of value with a grain of salt. The algorhithms that provide real estate values may be useful in a subdivision where all the parcels are the same and the homes are similar but wine country properties are anything but a typical 3 / 2 on a cul-de-sac. Wine country real estate is full of nuance including views, access and water just to name a few.
Site, Vineyard, Plantable
The core elements of Sonoma and Napa real estate values are: Site, Vineyard and Plantable Land. All three values have a dramatic range depending on various factors.
– The site value relates to the home or winery site potential. This is one value.
– The vineyard value is comprised by the acreage of planted vineyard.
– Plantable land value is you guessed it, comprised the acres of land that can be planted to vineyard.
Again, there is a tremendous amount of nuance within each value. For instance values for Sebastopol real estate and Healdsburg real estate have some surprising differences. Site values in Healdsburg are higher than in Sebastopol, but vineyard values and plantable land in Sebastopol are higher than in Healdsburg. Over in the Napa Valley, Oakville real estate is dramatically higher across the board than real estate in Calistoga. Totally straight forward, right. Ha! Believe it or not, there is a method behind the madness but that would require more time and several bottles of wine.
BTW, who has more vineyard acres: Napa or Sonoma?
As of 2019 Sonoma County has a total of 59,193 vineyard acres while Napa County tops out at 45,433 acres. Both regions added minor amounts of vineyard over the previous year.
What are the current values in Sonoma and Napa?
As previously mentioned we are seeing some resistance at current levels due to a large 2018 harvest. Nonetheless, in Sonoma and Napa quality demands a premium. We have continued to see upward pricing over the last several years. Here are some basic metrics from the recently released Ag Trends publication, Trends in Ag Land & Lease Values, ASFMRA-California.
Napa Outlying Areas (Pope Valley, Gordon Valley etc…)
- Site 0 – $350k
- Plantable $25k – $50k / acre
- Vineyard $50k – $130k / acre
Napa Prime Areas (Oakville, Rutherford, Saint Helena, Yountville etc…)
- Site $2m – $5m,
- Plantable, $200k – $250k / acre,
- Vineyard $300k – $400k / acre
- Site 0 – $3,100,000 (Prime Site areas: Healdsburg, Sonoma etc…)
- Plantable $25k – $120k / acre
- Vineyard $100k – 215k / acre (Prime Vineyard areas: Russian River AVA, Alexander Valley AVA etc…)
Now that you have some insight in to the riddle of wine country real estate, feel free to reach out with any questions. Last but certainly not least, if you are in the market to buy or sell be sure to contact a professional that understands the nuances of wine country.