2024…Will the Shelves Be Stocked or Not
The volume of sales, as well as the number of homes available for sale recorded 30+ year lows in 2023. Most economists are calling for a 20 percent increase in sales volume in our overall marketplace for
2024. Wouldn’t that be great!
According to BAREIS MLS, as we embark into the new year, we find our markets are off to a brisk start. The data points indicate that Sonoma County buyers successfully contracted to purchase 222 single-
family homes – 20 percent greater than a year earlier. Property owners delivered just 164 new offerings during the month – off 35 percent from last year along with being another new historical low for the
period – buyers managed to complete purchases on 184 dwellings – five percent more than the 175 units that changed hands in January just a year ago.
With February now upon us, buyers will be surveying the 404 available homes remaining in Sonoma County – an encouraging 15 percent greater than in 2023 – which may bode well for the further release
of greater volume during 2024 than we saw throughout all of 2023, just don’t bet on it as the inventory creep has been lagging all expectations for the last 24 months and if interest rates continue their trend
lower, then our market should start to experience even more accelerated demands from home seekers.
As the year continues to take shape, buyers will be making determinations on these offerings, along with the debut of new ones, as to purchasing now, or not, and this will show up in a common market
measure - the absorption rate. January proved this out again with a 46 percent reading as Sonoma County remains buoyant with activity lifted by lower mortgage rates and the continuous exit of
population from the core Bay Area region and positive relocations to the wine country from other out of state buyers.
The absorption rate is calculated by dividing the total number of homes sold in a month by the total number of homes available for sale at the end of the same month. A high absorption rate – 20 percent
and above – indicates that the supply of available homes will shrink, thereby increasing the odds that an owner will sell a property in a shorter period. Conversely, an absorption rate below 15 percent is
indicative of a buyer’s market, meaning homes are selling more slowly.
Marin property owners introduced only 60 new single-family offerings in January – 47 percent less than the 113 units that debuted during the same period last year, which was an all-time low record even
then. This woefully lacking inventory introduction could exacerbate a staunchly more competitive environment for both new and existing buyers in pursuit of making Marin their home in 2024. Buyers
absorbed 75 homes in consummated contracts while sellers brought finality to another 73 transactions during the period – 35 percent ahead of last year - leaving the entire region with 125 dwellings available for buyers to peruse as we break into February, another all-time low reading. Marin’s absorption rate steadied at 58 percent - indicating that this market may experience price escalations as more suitors become available for each prospective offering, and with interest rates trending more favorably for the borrowing population, this could certainly make acquiring your new home in 2024 an even more competitive task while pushing more buyers northward for homeownership into Sonoma County.
Napa County’s markets still trail both those mentioned above when it comes to activity. January witnessed the release of 48 new offerings to the marketplace – 40 percent less than twelve months
earlier along with being another new monthly low. The lack of willing sellers is leaving inventory levels in the shallows once again with 175 dwellings for home seekers to peruse this February. Buyers placed 50 new deals into escrow – four fewer than the prior year – while closed transactions tipped the scales at 39 during the month, steadying the absorption rate at 22 percent – continuing to near the threshold of a balanced market, though still with a seller bias.
At the outset of this article, the markets being referenced are broad - think statewide or nationally – though real estate is a hyper-local market experience with specific benefits and hurdles in each. Before
you get too excited that there will be more to select from as far as new inventory in comparison to last year, you need to consider the “how.” This would be more plausible to our local markets if we were
launching large master planned new communities in our region – think 3,000 to 5,000 newly built single-family homes, not apartments – there are not. Coupled with a mass exodus of population out of our
area – this is not. What we are experiencing however is a greater demand from those that live throughout the larger core Bay Area region to make their home here – this only adds pressure to our
marketplace and pressure in this direction typically means stable values to runaway prices that lead us to remember a similar cry that you here at stadiums…Home’s, get them while they are here! Home’s, get them while you can!
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