According to the Chinese Zodiac we are embarking on the year of the pig – those of you born in 1935, 1947, 1959, 1971, 1983, 1995, 2007 and 2019. Subscribing to these teachings would indicate that this year may have much in store for you and that it is typically the most challenging of times – just like every other sign in the year of their birth. The focus should be on getting through the year unscathed to set up the next two years for greater prosperity by planting the seeds of the future and making sure to attend the happiest events that may occur during this twelve-month period to insure success in the following years. Embracing these theories may help you forage ahead in a prodigious manner that keeps you level headed, patient and hopeful.
Having finally shrugged off the continuous compressions that have hampered our markets flow of commerce from the prior seven years, Sonoma County sellers continue to add supply to a market badly in need of it. The region typically sees definitive growth in inventory as each new year unfolds with peaks typically showing in spring and summer months while valleys appear in fall and winter. According to BAREIS MLS, with one month in the books for 2019, we saw Sonoma County buyers successfully contract to purchase 266 single-family homes in January – a fraction of a percent greater than the prior year. This January, property owners launched 213 new properties during the period after introducing 359 new listings just a year earlier when sellers were hot to chase the demands of fire victims. Transactions were completed on 228 dwellings during the period – seven percent less than in 2018 – leaving 622 dwellings to carry over into February and representing a 51 percent climb in inventory from this same period a year earlier. The cumulative effect indicates a market strengthening from last Summer’s doldrums with an elevated absorption rate of 37 percent – cementing the case that the sluggishness witnessed this last year has been abated by lowered interest rates, a pull-back in prices and renewed requirements from buyers.
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 of time. Conversely, an absorption rate below 15 percent is indicative of a buyer’s market, meaning homes are selling more slowly.
Marin County’s marketplace is indicating similar trends as their neighbor to the North with only 94 new offerings arriving to the market this January. Buyers latched onto 95 newly consummated deals – 23 percent greater than in 2018 – while sellers closed out another 76 transactions. This left the entire region with 218 homes as offerings to buyers in February – foretelling home seekers, with a current absorption rate of 35 percent, that they better strike early.
Napa County’s markets have steadily shifted closer to balance year over year as the chasm between sold properties and available properties continues to widen. Sellers delivered 72 new homes to the market while buyers jumped on board contracting for 77 deals during the month – on par with a year earlier. Completed transactions for the period tipped the scales at 51 single family homes – a 38 percent slip in volume from 2018 – while activity during the month allowed February to open with an availability of 253 dwellings – a 34 percent increase in the available supply for buyers to select from while pressuring the absorption rate closer to balance with a weakening reading of 20 percent.
Being a goat myself – those of you born in 1943, 1955, 1967, 1979, 1991, 2003, 2015 - the year portends greatness. Having endured the last two years of the dog and the rooster, which brought about some of the most challenging times, we are set up for good fortune under the sign of the pig and the rooster – which follows in 2020. So, if you find yourself in a spot of bother during this year or next, may I suggest you align yourself with a goat to better insure your own prosperity.