A Market Moving Laterally

A Market Moving Laterally

In many areas of the nation, as is within Sonoma County, we are still experiencing very tight inventory conditions coupled with steady demand for the most appropriately priced properties in the best
condition.

According to BAREIS MLS, Sonoma County had exactly 641 single-family homes left for sale at the close of May – 31 percent fewer than this same period twelve months ago. Sellers delivered 407 new listings to the market during the period – 33 percent less than in 2022 - while buyers garnered control of another 415 new deals – 24 percent off from a year earlier due to higher interest rates, lower inventory levels and the seasonality of our marketplace. In support of these metrics, completed sales tipped the scales at 374 for the period – 28 percent fewer than the 520 homes sold last year.

The continued pace of the markets can be measured by the months’ supply of inventory (MSI) and, with the Federal Reserve aggressively trying to dampen demand by raising the cost of money, MSI has
continued to stabilize and in May the level stood at 1.7 – indicative of a stronger seller’s market and one picking up steam in that direction over the course of the four previous reporting periods.

MSI is the metric that indicates the number of months it would take to sell the current inventory at the current rate of sales. An MSI ranging from 4.0 to 6.0 is indicative of a balanced market, with lower
numbers increasingly favoring sellers and vice versa.

Getting down to the details in the town of Sonoma, which submarket includes the hamlets of Kenwood and Glen Ellen, there were 119 homes reported for sale as May concluded – just 4 percent less than this same period a year ago. This region experienced the addition of 48 new listings during the month while buyers garnered accepted contracts on 38 more properties. Sellers in the valley awarded keys to 36 new homeowners – 27 percent off from a year earlier – allowing MSI to rise to 3.3 with an expectation of regressing to a tighter reading in June.

Healdsburg witnessed 21 new listings arrive to the market last month – essentially on par with a year earlier. Buyers absorbed 23 homes in new deals while sellers closed out 17 transactions leaving this
submarket with 69 homes for presentation to buyers in June – 20 percent less than last year’s historic lows revealing an MSI swinging back and forth while settling at 4.1 for the period. Petaluma’s Westside attracted 23 new sellers in May which helped available inventory to stabilize for now at 38 homes for buyers to select from by months end. Home seekers grabbed 24 new deals in the
period while sellers closed out 20 more purchases leading to an MSI registering at 1.9.
Sebastopol wrapped up the period with 38 available homes for buyers to consider inclusive of the 22 additional offerings brought forth in the period. Home shoppers placed 19 more dwellings into contract
while sellers completed 29 sales – 16 percent more than in 2022 - allowing MSI to close at 1.3 in May. Showcasing a much tighter market than just a year earlier, Windsor property owners delivered just 19
new listings in May while buyers captured 25 deals during the period. Sellers closed out 33 more transactions leaving 28 single-family homes available for buyers to peruse in June while highlighting an MSI of 0.8.

Listings and sales are happening in an orderly fashion with interest rates in the early to mid-six percent range in what we call a horizontal – level value – type market. We anticipate that when rates come off
these peaks and settle solidly under the six percent threshold, we will see enhanced demand in the marketplace from buyers and the question then will be what inventory of homes is there to satiate this
appetite? This may foreshadow a move up to a new price level and could potentially leave those awaiting a cataclysmic event that offers both a better price entry point and mortgage cost wondering
what happened. Get in touch today and we will help you navigate the pathway that suits your needs best.