We live in a world of pipelines and supply chains that impact everything from what appliances are available, to how much gas costs and when the components will arrive so we can complete something we can use.
According to BAREIS MLS, September’s data points indicate that Sonoma County buyers successfully contracted to purchase another 559 single-family homes. An amazing feat considering property owners only delivered 347 new listings during the month – 33 percent fewer than last September. Buyers closed on 491 sales by months end – held back purely due to a lack of sellers entering the market.
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 hurried pace causing available inventory to fly off the shelves while less is being restocked, leaving just 625 single-family homes to carry over into October and with the anticipation of fewer homes debuting in the market each month from now through January this could further exacerbate current conditions especially considering the current absorption rate of 79 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 smallest of the seven Bay Area Counties, Marin, is one of the few hotter locations - at least on a percentage basis - than Sonoma County. More typical of what you would see during the winter holiday low, sellers introduced just 162 new single-family offerings in September – 44 percent less than a year earlier. Buyers promptly absorbed 234 homes into consummated contracts while sellers closed out 189 transactions during the period leaving the entire region with 216 homes available for buyers to peruse in October – 35 percent less than just twelve months ago. Marin’s pace highlights one of the Bay Area’s busiest markets with the absorption rate now at 88 percent.
Napa County’s markets are steadying with available monthly inventory closing out September at 242 units – the same level it has been at for the preceding five months. Sellers managed to deliver just 94 new homes to market this last month – the fewest of any month since last December - while buyers placed 109 new deals into escrow. Home sellers closed out another 104 sales in the period establishing a 43 percent absorption rate.
Expect our markets to see the typical seasonal tapering to take over in this last quarter of the year and depending on how active current and new buyers are during the waning months of 2021 this will dictate what shape the market will take as we enter the new year.