A Market Thrusting Ahead
The housing market locally, regionally and nationally are seemingly experiencing the same cadence…Overwhelmed with buyers and short of inventory.
According to BAREIS MLS, Sonoma County had exactly 292 single-family homes left for sale at February’s conclusion – 40 percent fewer than this same period last year. Sellers delivered just 312 new listings to the market during the month – 39 percent less than in 2021 - and, if this trend continues, sales will have no choice but to fall as inventories continue to be depleted and options are drying up for purchasing. This February, buyers gained control of another 343 new deals – 16 percent off from a year earlier though due only to available inventory being 60 percent of what it was last year at this time. In support of these metrics, completed sales tipped the scales at 266 this last month – 16 percent fewer than the prior year - due to the lack of sellers participating in the marketplace.
The continued pace of the markets can be measured by the months’ supply of inventory (MSI) and, with vastly growing demands from buyers in our region along with extremely attractive interest rates driving our markets, the data shows MSI now at 1.1 as of last month. This display of liquidity and activity is among the highest in the seven Bay Area counties we track and, in part, due to the native demands of households, unique to our region, who are still replacing the 6000 plus homes they lost in the Tubbs, Nuns, Kincade, Glass and Wallbridge Fire calamities.
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 37 homes reported for sale as February ended – 49 percent less than this same period a year ago. This region experienced the addition of 38 new listings during the period – 37 percent fewer than last year - while buyers garnered accepted contracts on 32 more properties. Sellers in the valley awarded keys to another 24 new homeowners – essentially on par with last year - steadying the MSI at 1.5.
Healdsburg witnessed just 14 new listings arrive to the market last month – 66 percent fewer than in 2021. Buyers absorbed 22 homes in new deals while sellers closed out another 16 transactions leaving this submarket with 31 homes for presentation to buyers in March, along with an MSI of 1.9.
Petaluma’s Westside attracted 16 new sellers in February which allowed available inventory to begin the new month with 15 homes for buyers to select from. Home seekers grabbed 20 new deals in the period while sellers closed out 14 purchases pushing the MSI to 1.1.
In West County, Sebastopol’s supply of inventory is still being measured in weeks not months. February wrapped up with merely 11 available homes for buyers to consider – 52 percent less than last year and this is inclusive of the 17 additional offerings unveiled during the period. Home shoppers placed 18 more dwellings into contract while sellers also completed 15 sales. With an MSI of 0.7 – equal to a three-week supply of homes available – continue to expect values to rise to encourage more sellers into the market.
Russian River property owners delivered 13 new listings in February - falling significantly short of demand as buyers captured another 15 deals during the period. Sellers closed out 11 more sales leaving 22 single-family homes available for buyers to peruse in March while highlighting an MSI now at 2.0.
Having served our marketplace over 30 years, witnessing downturns, runaway values, slow stoic markets, the “Great Recession” and now a pandemic, the obvious solution is to unleash the shackles that tie developers hands and prevent new development. Builders would gladly put shovels in the ground but are hampered by costs associated with bureaucratic red-tape and environmental policies while also being dictated requirements to construct homes that are “affordable”. Unless these onerous impediments are set aside then we will continue to experience the times we live in today.
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