Change in Seasons, Fresh Start for Buyers

Change in Seasons, Fresh Start for Buyers 

As Summer is eclipsed by Fall, we are experiencing greater calls from both new and hibernating buyers. Will this lead to a robust new turnover in sales?

According to Compass, Sonoma County had exactly 893 single-family homes left for sale at the close of August – 27 percent greater than this same period a year earlier and the same total for the third month in a row. Sellers delivered 294 new listings to the market during the month – 33 percent less than in 2023 and a another new all-time low - while buyers garnered control of another 388 new deals – 30 percent more than a year ago. In support of these metrics, completed sales stood at 370 for the period – eight percent greater than the 344 sold at this same time last year.

The continued pace of the markets can be measured by the months’ supply of inventory (MSI) and, with the Federal Reserve having now reduced interest rates we are witnessing a market restabilizing at a seller favorable reading of 2.4 – indicating that our market will likely not slip towards a balanced one and will likely remain as it has since 2011, a sellers’ market. 

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.

Steadying near activity readings that are on the edge of being considered balanced, the tony town of Sonoma, which submarket includes properties throughout Kenwood and Glen Ellen, reported 123 homes for sale as August concluded – 13 percent higher than last year. This region experienced the addition of 29 new listings during the month – another historical low - while buyers garnered accepted contracts on 35 more properties, 17 percent above last year’s demand levels. Sellers in the valley awarded keys to 38 new homeowners allowing MSI to edge even further into sellers’ favor closing the period at 3.2.

Healdsburg witnessed 16 new listings debuting in the market last month – 27 percent fewer than a year ago. Buyers absorbed seven homes in new deals while sellers closed out another 14 transactions leaving this submarket with 105 dwellings for presentation to buyers in September – 43 percent above year ago levels - culminating in an MSI reading of 7.5 – intimating that buyers in this submarket should have strong influence over the terms of a transaction.

Not so much the case on Petaluma’s Westside, as sellers introduced just nine new listings in August leaving available inventory at 44 homes for buyers to select from by month’s end. Home seekers grabbed 23 new deals in the period while sellers closed out another 22 purchases pressuring MSI tighter to 2.0 for the period – a market where sellers are certainly still in the driver’s seat.

Similarly, Sebastopol wrapped up the period with 37 available homes for buyers to consider, which included the 20 new offerings from property owners in August – another historic low for the period. Home shoppers placed 22 more abodes into contract while sellers completed 19 sales, allowing MSI to register at 1.9.

With Autumn now in play and interest rates solidly in the five’s, we are seeing buyers slowly reengage in the market now that they can pair up homes they like with interest rates that look much more attractive than just 6-months ago when we were staring at eight percent loans. But let’s not get ahead of assuming this means a landslide of new deals as the consumer confidence levels may need several months to recover – much like trying to turnover an old craggy engine. I anticipate that February will be when you really see buyers back in force.