As we put 2025 behind us and look forward into 2026 I want to wish you a Happy New Year!  It can only get better from here, or at the very least, it can stop getting worse.   We have had a rough road the last couple years in what can only be described as the most challenging vineyard and winery real estate market in memory.  One could argue we have hit bottom, or have we?

Carlisle Vineyard – Iconic Zinfandel

The New Reality

The debate between buyers and sellers is certainly underway.  Getting buyers and sellers on the same page is a serious accomplishment as we adjust to the new reality.  We are in a space where some sellers have accepted market conditions and adjusted their expectations. Other sellers have lowered prices due to financial constraints and the need to liquidate, or to clean up their balance sheet and put that money to work elsewhere.  Then there are sellers that are still holding on to market values from several years ago.   Buyers on the other hand are trying to time the market, looking for the perfect fit and a deal.  Below are insights into the challenging market dynamics we are facing.

Accessibility – Super premium properties that were almost impossible to buy before may now come up for sale.  Don’t expect significant “deals” on these properties but be glad they are available.

High Quality Vineyards & Wineries – These properties have a track record of producing excellent quality fruit and wine from premium AVA in good locations.   If they have quality contracts and are profitable sellers will expect a premium price.  If they do not have contracts or a profitable business, sellers should adjust the price accordingly.

Lifestyle Properties – Properties that provide the wine country lifestyle include a nice home and quality amenities on acreage, typically in a good location, and in a pleasant setting.  Buyers tend to be attracted to these types of lifestyle properties especially when they are turn-key and in excellent condition.

Income Producing Investments – Whether it is a vineyard with contracts and or a home with a strong record of rental income, investors are still sniffing around.

Mothballing the Vineyard – Mothballing the vineyard is for those who do not have contracts but see a path forward once the grape market settles.  Now is the time to rein in farming expenses until extra costs can be justified.  Farming just enough to keep the vines healthy but not to the full extent necessary to produce a viable crop.  This strategy may reduce farming costs by 50% or more.

Leasing Your Vineyard – Another option is to offer attractive lease terms for a grape grower or winery to farm your vineyard in exchange for the crop until the grape market turns.  This is a way to offset expenses in the short term.  Be sure to specify farming practices for your vineyard to protect the quality and health of your vines.

Sonoma Stage Vineyard Petaluma Gap

Repurpose the Land –  If your vineyard is in a below average location or is in poor condition where the economics are not favorable going forward it could be time to pull the vines. Removing the vines will make the land available for other uses.  Alternative uses could be a different crop, livestock, the land may be suitable for horses or lay fallow and rest until the market warrants a return to wine grapes.

Help Unlock Your Equity – If you have decided to sell there are options that can be helpful in unlocking your equity.  One option is to consider seller financing.  Seller financing means the seller acts as a lender carrying back a note allowing the buyer to bypass traditional banks.  A considerable downpayment is typical along with a term of 3 – 10 years, and the interest rate is negotiable.  Sellers will want to qualify the buyer’s financial strength and review their creditworthiness.  Seller financing can be a helpful tool in a challenging market.  If you are a winery selling a vineyard, offering a grape purchase agreement for one to three years is also another way to encourage buyers to make the purchase.  There will likely be a trade off in dollars spent farming and winemaking vs the larger equity recouped from selling the property.

Closer To The Bottom Than The Top

When you ask around, you are certain to get various opinions. But the consensus is that we are bouncing along the bottom.  The big downturn has already happened; the impacts and results are still trickling through, and definitive market value has yet to be broadly accepted in Napa and Sonoma Counties.  While it is possible there may be another leg down, most can agree that we are closer to the bottom than the top.

In conclusion if you are a buyer with a long-term horizon and you see a vineyard, winery or lifestyle property that fits your plan, now is the time to buy.  Prices are generally down significantly from a few years ago.  Prices may or may not go lower as sellers adjust to the new reality.  If you are a seller, I recognize these are challenging times. If you are thinking of selling, I am here to help. Please contact me to discuss your plans.  Finally, let’s all work together to make 2026 better than ever.

Cheers!

David Ashcraft

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Some additional articles that might be helpful:

Real Estate Wine and a Little Bit of Charm 2025

What’s Past is Prologue in a Bifurcated Real Estate Market

What is a vineyard really worth?  It depends.

Wine Country Real Estate Building Blocks

Looking to Buy A Winery, Start Here

Buying a Vineyard?  A short course to the basics.

Which AVA came first?

If you are serious about your wine country search, please contact us today.  Last but least, here is link to more local resources.