Remember the Cabbage Patch dolls, Beanie Babies and even The Pet Rock? Historically they were all part of a craze at their point in time – a sudden and rapid burst of enthusiasm for an object in short supply. These objects were not necessarily costly though they were popular beyond measure for a short period. Unlike these, homes hold a different place in our world. Homes are where we choose to live, create memories, foster our families, break bread over meals, shelter us from the elements – like COVID – though also represent a found pride in ourselves and our aspirations for the future.
According to BAREIS MLS, March’s data points indicate that Sonoma County buyers successfully contracted to purchase 588 single-family homes – 112 percent greater than just a year earlier and held back from being even greater by the lack of inventory available. Property owners delivered 441 new listings to the market during the period – three percent less than last March - while the County saw a trend affirming 427 sales reach fruition by months end – 42 percent greater than a year ago.
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 immense activity is causing available inventory to zoom off the shelves while less is being restocked, leaving just 491 single-family homes to carry over into April – a stunning 27 percent fewer available listings than in 2020. The voracious demand for homes has driven the median price to a new high of $766,000 while also establishing one of the Bay Area’s highest absorption rates of 87 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.
Less voluminous though more voracious, Marin County’s marketplace showcased just 185 new single-family offerings – 10 percent fewer than a year earlier. Buyers promptly absorbed another 256 homes into consummated contracts – 151 percent greater than in 2020 – further echoing the chasm referenced above. Sellers closed out 223 transactions during the period - compared with 133 last year at this same time - leaving the entire region with only 172 homes available for buyers to peruse in April. Marin’s extreme pace indicates an absorption rate of 130 percent – an absorption level never experienced in Marin and providing further evidence of the continued pressure being created by the deurbanization movement away from the core Bay Area metropolises. Marin also surpassed its prior all-time high with respect to its median value closing the month at $1,695,000.
Napa County’s markets are benefitting from similar trends as sellers managed to deliver only 116 new homes to market this last month – 22 percent fewer than in 2020. Buyers rushed in to grab 157 new deals – 112 percent greater than last year - while sellers closed out a remarkable 114 sales in the period. This left the region with just 180 available dwellings heading into April - showcasing a 63 percent absorption rate along with median values closing the period at $862,000 – not an all-time high like we saw last month, though still 14 percent ahead of just a year earlier.
To many the crazy times we are currently experiencing – which by the way are just our version of crazy since other generations have had to deal with similar, if not worse – are just a reflection of settling into what we each want for and from our lives. Everyday you have a chance to shape and shift how you want your life to be and the road you travel to get there…for now, many are determining they want the road to lead them here!
