Buyers Emerging from the Great Getaway Summer
On the street and in the office’s, we are seeing more people return home mentally and physically from their long absentee summer.
The Santa Rosa metro region is still working to accommodate the demands of the greater Bay Area along with its’ own, and according to BAREIS MLS – with July in the rearview mirror - the data points to a marketplace trying to find its cadence with only 205 single-family homes remaining for sale in the city and its environs – 16 percent less than this same time a year ago. With interest rates rising then settling back a little, buyers laid claim to just 131 single-family homes during the past month – a rate 50 percent less than a year earlier hampered by lower available inventory levels, interest rate pressure and buyers extensive “summering” activities.
The entire municipality introduced merely 119 new listings to the market over the last month – 51 percent fewer than in 2021. The most recent period also found Seller’s handing over keys on 150 completed sales – 40 percent behind last year and held back due to the lack of homes for buyers to select from and their adversity to paying the higher costs associated with a new mortgage. As our market continues to deal with historically low inventory, the statistics will be artificially hampered since a significant portion of unsatiated demand is going unmet each month as more properties continue to be absorbed while fewer sellers enter the “open” market – this will eventually point to a false reading of sales shrinking as when sales fall due to lack of supply it is a totally different story than when they fall when inventories are bountiful.
This compression is affirmed by Santa Rosa recording its’ Months’ Supply of Inventory (MSI) at 1.4 – a slight, though expected, bump higher over the previous period. This can be attributed to the fundamental shift in population migration from the greater Bay Area along with the cost of money – for now - in our current economy coupled with a lack of property owners interested in relinquishing their current homes.
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.
Within the city, Northeast Santa Rosa – the North Bay’s most active submarket - saw the introduction of merely 48 single-family homes in July – 35 percent fewer than this same period a year ago. The supply of homes was met with active demand during the period as there were only 89 dwellings for home seekers to consider by months end – two percent greater than the depths we were experiencing at this time last year. Buyers still managed to absorb 42 homes into contracts while sellers received closing checks on another 43 properties – resulting in an MSI of 2.1.
Southeast Santa Rosa saw the supply of listed properties rest at 38 by the end of last month. This submarket debuted just 18 new homes in the period while buyers garnered accepted offers on 26 additional dwellings. This coveted corner of the city experienced 27 formal transfers in July culminating in an MSI reading of 1.4.
Oakmont is moving in lockstep with its surrounding marketplace with July’s activity leaving only 21 homes available for sale at the end of the month. Property owners launched merely nine new offerings in the period while buyers inked out another 10 new deals. Sellers completed another 15 transactions during the month – 50 percent fewer than the prior year, though keep in mind available inventory was down over 60 percent - leaving this niche market with an MSI of 1.4.
Northwest Santa Rosa, due to its overall price point, is still a hot market. Buyers swooped in to gain control of 39 more deals, leaving 35 single-family homes available for sale at months end. Sellers committed only 25 additional offerings to the markets while another 47 homes completed the closing process. Steady, intense activity has caused MSI to tighten from last month to 0.7, again.
Southwest Santa Rosa sellers delivered 19 new offerings to the market this past month while consumers placed 14 more dwellings into contract. Newly minted homeowners captured keys on 18 closings, leaving 21 homes available for buyers to peruse in August while establishing an MSI of 1.2.
The Initial days of the end of Summer are kicking in. People are just returning from a myriad of activities and events to get back into their routines, kids are back in the classroom and guess what? Agents phones are ringing now from buyers that had been distracted with a summering mindset and new ones just getting into the process. Its too early to see data on this, though as the next few months unfold, expect to see it show up in the numbers.
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