Even as our population begins to reflect a return to normalcy, and with so many in pursuit of their chance to take a vacation - which typically interferes with the summer market activity levels - our real estate markets remain buoyant with demands and lacking in prospective sellers.
According to BAREIS MLS, June’s data points indicate that Sonoma County buyers successfully contracted to purchase 619 single-family homes – essentially parallel to last year when the frenzy for housing kicked into high gear as Urbanites chose suburbia to be their place to relocate too. Property owners delivered 514 new listings to the market during the period – 10 percent fewer than last June - while the County saw a trend affirming 620 sales reach fruition by months end – 32 percent greater than in 2020.
The compression within our markets is easily understood by realizing that the spike in buyer demands coupled with reluctant sellers over time creates a chasm that inevitably forces prices higher to tempt sellers to market. This prolonged immense activity has created a frenetic pace causing available inventory to zoom off the shelves while less is being restocked, leaving just 684 single-family homes to carry over into July – a stunning 22 percent fewer available listings than a year earlier – and, historically, the summer season is typically the peak level of inventory we experience each year. The voracious demand for homes has driven the median price to a new high of $823,000 while also establishing one of the Bay Area’s hottest absorption rates of 91 percent.
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. Conversely, an absorption rate below 15 percent is indicative of a buyer’s market, meaning homes are selling more slowly.
One of California’s hottest markets for demand, Marin County, is one of the few locations with an even more voracious buyer appetite – percentagewise - than Sonoma County. This marketplace showcased just 181 new single-family offerings – 34 percent less than a year earlier. Buyers promptly absorbed another 286 homes into consummated contracts – six percent fewer than the previous June though only held down by the lack of available homes for sale. Sellers closed out 328 transactions during the period - compared with 243 last year at this same time - leaving the entire region with only 205 homes available for buyers to peruse in July. Marin’s extreme pace indicates an absorption rate of 160 percent while also surpassing last month’s all-time high with respect to its median value closing the period at $1,778,000.
Napa County’s markets are benefitting from similar trends as sellers managed to deliver just 102 new homes to market this last month – 40 percent fewer than in 2020. Buyers rushed in to grab 133 new deals while sellers closed out a remarkable 147 sales in the period – 43 percent ahead of June 2020. This left the region with just 231 available dwellings heading into July - showcasing a 64 percent absorption rate along with median values closing the period at $951,000 – a new all-time high.
The short answer is, no! The dynamics point to a marketplace that just absorbs properties at such a rate that supply does not grow which also forebodes further price increases. Come see this new home today from 1-4pm and let’s talk about your future!