As Webster’s dictionary denotes, fatigue is an extreme tiredness resulting from mental or physical exertion. With market participants - buyers, sellers and realtors – all being human, a hyper active market can weigh on those as the energy of the pursuit for new homes overwhelms everyone at some point typically causing a pull back in overall activity and allowing for those who have tried on many occasions and been rebuffed by market forces to withdraw to recharge for a period before reapproaching.
According to BAREIS MLS, Sonoma County had exactly 698 single-family homes left for sale as August concluded – seven percent greater. Sellers delivered just 451 new listings to the market during the month – 11 percent fewer than last year and, if this trend continues, sales will have no choice but to fall as inventories are depleted and options dry up for purchasing. Buyers gained control of another 537 new deals during the period – the same as last year. In support of these metrics, completed sales tipped the scales at 585 this last month – six percent more that the frantic pace we were getting accustomed to in August of 2020.
The continued pace of the markets can be measured by the months’ supply of inventory (MSI) and, with vastly growing demands from buyers in our region along with extremely attractive interest rates driving our markets, the data shows MSI hovering at 1.2 as of last month – with forecasting for steadiness at this level. This display of liquidity and activity is among the highest in the seven Bay Area counties we track and, in some part, due to the native demands of households, unique to our region, who are still replacing the 6000 plus homes they lost in the Tubbs, Nuns, Kincade, Glass and Wallbridge Fire calamities.
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 generally indicative of a balanced market, with lower numbers increasingly favoring sellers and vice versa.
Getting down to the details in the town of Sonoma, which submarket includes the hamlets of Kenwood and Glen Ellen, there were 96 homes reported for sale as August ended. This region experienced the addition of just 34 new listings during the period – 40 percent fewer than last year - while buyers garnered accepted contracts on 49 more properties. Sellers awarded keys to another 54 new homeowners – maintaining the trend from twelve months earlier – delivering a steady MSI reading of 1.8.
With prices amongst the highest within Sonoma County, Healdsburg witnessed 29 new listings arrive to the market last month while buyers absorbed 27 homes in new deals. Sellers closed out 26 transactions – 20 percent ahead of a year earlier - leaving this submarket with 94 homes for presentation to buyers in September, along with an MSI of 3.6 – indicative of a market experiencing buyer fatigue as it nears a balanced reading.
Petaluma’s Westside attracted enough new sellers to see inventory rise to 32 homes remaining for sale by month’s end – primarily due to the 31 new listings delivered during the period. Sellers found their way into 23 new contracts while buyers completed purchases on 19 additional dwellings – allowing MSI to rise to 1.7.
Across town, Petaluma’s Eastside supply of inventory is still being measured in weeks not months - to be precise two weeks! August wrapped up with 14 available homes for buyers to consider - inclusive of the 27 additional offerings unveiled during the period. Home shoppers placed 36 more dwellings into contract while sellers also completed 40 transactions – the highest level since we entered the pandemic and no surprise as this market continues to capture interest due to is relative affordability in comparison to surrounding markets let alone the Bay Area. With less than a single month’s supply of homes being available – MSI at 0.4 – expect values to rise in order to continue to encourage more sellers into the market.
Constricted by the availability of new supply, Sebastopol sellers delivered just 23 new listings in August - falling severely short of demand as buyers captured another 27 deals during the period. Sellers closed out 30 more sales leaving 40 single-family homes available for buyers to peruse in September while highlighting an MSI down to 1.3.
Since this fatigue may be a broader feeling in the market, as a buyer, you may find - provided you can stomach the resolve – that this could be the time to cross your finish line with your arms raised with success and a sense of accomplishment…and we got that all day for you!