A New Push of Buyer Demands…Coming Soon!
A recent “Ransomware” event within our national Multiple Listing Service (MLS) provider caused some operational panic for practitioners and consumers this August and finds itself still in the process of
restoring the systems and data, so this month’s charts may not capture the metrics we watch in their entirety.
According to BAREIS MLS, with August in the rearview mirror, the data points indicate that Sonoma County buyers successfully contracted to purchase 294 single-family homes – 21 percent less than the
prior year. Property owners delivered 270 new offerings during the month – off 30 percent from a year earlier along with being another new historical low for this period – while buyers managed to complete
purchases on 304 dwellings – 16 percent less than a year ago.
With September now upon us, buyers will be surveying the 693 available homes remaining in Sonoma County – 10 percent greater than in 2022 and the first month in three years where more available
inventory exists than the year prior. Home seekers 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. August left us with this metric reading at 44 percent in Sonoma County indicating buyers have put last year’s perfect storm of challenges behind them and are still determined to acquire their new home.
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 110 new single-family offerings last month – 32 percent less than a year earlier – with buyers absorbing 122 homes in consummated contracts. Sellers brought finality to
another 119 transactions during the period – 37 percent fewer than in 2022 - leaving the entire region with just 224 dwellings available for buyers to peruse this month – three percent lower than last year at
this time along with being another new all-time low inventory mark for the period. Marin’s absorption rate stayed elevated in August at 53 percent - indicating that this market is gaining strength with regard to property values moving higher along with establishing an even more competitive environment for
buyers.
Napa County’s markets are trailing activity levels of both those mentioned above. August witnessed the release of only 83 new offerings to the marketplace – 28 percent less than twelve months earlier –
leaving inventory levels in the shallows once more with merely 264 dwellings for hopeful homeowners to peruse in September – another all-time low for the month. Buyers placed 69 new deals into escrow –
21 percent less than last year – while closed transactions tipped the scales at 74 during the month allowing the absorption rate to rest at 28 percent – still indicating that this market is more in favor of
sellers as well though at a lesser rate than the rest of the Northbay.
As we have seen values regain last year’s losses and, in most cases plateauing just above that, we find a distinct resiliency within the marketplace, even with interest rates at a 25-year high. A primary reason
for this is that we have a large waive of the population aging into their initial buying years coupled with a complete under supply of new homes being produced thereby creating a strong base to move forward from – the only thing abating runaway values at this point are interest rates, though the savvy buyer knows better and understands they need to acquire their home now so they are in a position of
ownership when interest rates move in their favor and allow them to recast their cost of monthly ownership while the non-owning public will be left to compete over homes once again when interest
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