I think you may wish to rephrase your question and ask us how much can I afford for $____________. We could answer you with much more relevant information. The "Average" vs. "Median" home price is different as a lower or higher number will skew the "Average" price. Most newspaper articles refer to "median" as this is more indicative as to "where" the action is. The higher the "median" the more the market prices are moving upwards. Remember, the median is the mid-way point of the entire market when it comes to the particular "status" of the listing. If the median is $310,000 then half of the market is below and half above.
You did not ask if you wanted the "average sold" or "Average Listed" 3 bedroom home in Petaluma. This vary dramatically. You can furher reduce it to what is REALLY selling. All sales data should be analyzed not only for bedrooms/baths, but also the area. As my good friend Mike states below, historically the Westside has fetched overall higher pricing. But you also need to explore what "Type" of sale exists. In the greater Sonoma County marketplace we have 384 sales with a whopping 85% being either foreclosed upon proeprties being liquidated by the bank, REO,those wishing to sell their homes for less than what is owed, "Short-Sale" and new home product being dumped on the market. What do these folks all have in common? NONE of them will BUY or "Move-Up" in the marketplace after the sale is done. We have basically a "dead-end" marketplace. Great opportunity for buyers but for Sellers of none of the above--very difficult and trying!
The Westside is the "historical" district and the downtown Petaluma area is to step back in time to small town Americana. It has become very vital with the influx of new development or the "Theater District" which has been nicely merged into the old.
My favorite area is the "D" street neighborhood which has some grand dames of the Victorian era in all their gilded glory. But you can't go wrong in the other areas to the north or south. If you go east it's another story as it becomes more commercial/industrial the closer it gets to the River. The Eastside has much newer development and more "production" housing. It is indicative of most production housing neighborhoods in other towns along Hwy 101, Rohnert Park,Santa Rosa and Windsor. The newer the community the more foreclosures you'll encounter. The REO or Rea Estate Owned, foreclosed upon properties, rule the roost in today's marketplace.
As you can see--much to talk about and many questons to be answered. I've got a great tool on my web site called "Market Snapshot" which allows you to pick a neighborhood and pull up all actives, solds, google earth maps, plus schools, community information. Great stuff. My web site is below.
You have picked THE PERFECT time to buy a home! 50% off! With rates under 5% if you want to pay 1% origination fees. WOW!!