Falling Into Winter’s Gap
Not only do we have less sun on each successive day from now until December 21st, but we will also have less housing inventory as well. Sure, it’s a typical seasonal pattern, but one that has never reached these depths before.
The Santa Rosa metro region is working to accommodate the demands of the greater Bay Area along with its’ own, and according to BAREIS MLS - with October in the books - the data points to a marketplace still absorbing homes at higher than typical seasonal level with only 204 single-family homes remaining for sale in the city and its environs – 27 percent less than this same time a year ago when prospects were thought to be there lightest ever. Exacerbated buyer activity has claimed another 200 single-family homes during the past month – a rate 40 percent higher than a year earlier – which is an astounding accomplishment as we have continued to see less available new inventory arrive month over month during this past year.
The entire municipality introduced just 131 new listings to the market over the last month – 33 percent fewer than in 2020 - while the most recent period also found Sellers handing over keys on 203 completed sales - held back primarily due to the lack of inventory for buyers to select from. With the lack of a credible supply, the statistics will be artificially hampered due to a significant portion of unsatiated demand going unmet each month as more homes 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 is a totally different story than when they fall when supplies are bountiful.
This compression is affirmed by Santa Rosa recording its’ Months’ Supply of Inventory (MSI) at 1.0 – on par with the tightest market this metro has ever historically recorded. This can be attributed to the fundamental shift in population migration from the greater Bay Area along with the cost of money in our current economy coupled with a lack of property owners interested in leaving the area.
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 saw the introduction of merely 55 single-family homes in October and 27 percent fewer than this same period a year ago. The supply of homes was met with enhanced demands during the period as there were only 95 dwellings for home seekers to consider by months end – 28 percent fewer than the depths we were experiencing at this time last year. Buyers still managed to absorb 71 homes into contracts – 42 percent ahead of the prior October - while sellers received closing checks on another 56 properties - culminating in an MSI of 1.7 and falling.
An even tighter market, Southeast Santa Rosa saw the supply of listed properties rest at 30 by the end of last month. This submarket debuted just 22 new homes in October while buyers garnered accepted offers on 42 additional dwellings. This coveted corner of the city experienced 44 formal transfers in the period thereby establishing an MSI of 0.7.
Oakmont – once again a vigorous market where more buyers are showing up just as fewer sellers want to wade into the waters - has kicked it into gear with several steady months of heightened buyer activity as this region had only 34 homes available for sale as October concluded - the fewest at any period over the prior year. Owners launched just 20 new offerings in the period while buyers inked out 30 new deals - 114 percent ahead of last year. Sellers concluded 29 transactions during the month – 71 percent more than the prior year - leaving this niche market with an MSI of 1.2.
An inventory strapped market, Northwest Santa Rosa saw buyers swoop in to gain control of 37 more deals this month leaving just 27 available single-family homes for sale. Sellers committed just 23 additional new offerings to the markets while another 52 homes completed the closing process. This steady, intense activity has been holding MSI under a one-month supply for well over year and, as of October, it now rests at 0.5 – just a two-week supply of homes.
Southwest sellers managed to deliver merely 11 new offerings to the market this past month only to see consumers place 20 more homes into contract. Newly minted homeowners captured keys on 22 closings, leaving just 18 homes available for buyers to peruse in November while establishing an MSI of 0.8.
For those of you hunting for your new home, ask your agent about what they have available that is not necessarily out on the open market yet…this inventory that lurks in the shadows is very valuable and a great agent always has some of these – and knows where to find others.