Much like the Energizer Bunny commercials, this market just keeps on going.
According to BAREIS MLS, May’s data points indicate that Sonoma County buyers successfully contracted to purchase 641 single-family homes – 42 percent greater than just a year earlier and more than at any time over the previous decade and in some respects still held back by the slim amount of available inventory. Property owners delivered 520 new listings to the market during the period – eight percent fewer than last May - while the County saw a trend affirming 558 sales reach fruition by months end – 171 percent greater than in 2020.
The compression within our markets is easily understood by realizing that the spike in buyer demands coupled with reluctant sellers over time creates a chasm that inevitably forces prices higher to tempt sellers to market. This prolonged immense activity has created a frenetic pace causing available inventory to zoom off the shelves while less is being restocked, leaving just 669 single-family homes to carry over into June – a stunning 29 percent fewer available listings than a year earlier. The voracious demand for homes has driven the median price to a new high of $778,000 while also establishing one of the Bay Area’s hottest absorption rates of 83 percent.
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 rapidly, 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.
One of California’s hottest markets for demand, Marin County, is one of the few locations with an even more voracious buyer appetite, percentagewise, than Sonoma County. This marketplace showcased just 210 new single-family offerings – 29 percent less than a year earlier. Buyers promptly absorbed another 280 homes into consummated contracts – 17 percent greater than in 2020 – further echoing the chasm being felt in adjacent markets. Sellers closed out 264 transactions during the period - compared with 139 last year at this same time - leaving the entire region with only 207 homes available for buyers to peruse in June. Marin’s extreme pace indicates an absorption rate of 128 percent while also affirming last month’s all-time high with respect to its median value closing the month at $1,700,000.
Napa County’s markets are benefitting from similar trends as sellers managed to deliver 144 new homes to market this last month – one percent greater than in 2020. Buyers rushed in to grab 142 new deals – 31 percent greater than last year - while sellers closed out a remarkable 127 sales in the period – 98 percent ahead of May 2020. This left the region with just 235 available dwellings heading into June - showcasing a 60 percent absorption rate along with median values closing the period at $815,000.
This extension of ongoing trends gives credence to a market with legs – effectively meaning one with broad based support. The migratory nature of people over this last year to seek a preferred place to make their new home while pursuing happiness and safety continues to unfold. So, where do you want to be?