We have written about this for years and now what the market is experiencing is a culmination of the lack of new construction, the loss of existing housing stock – due to fires – and the immense demands from outside our markets to relocate to our region.
According to BAREIS MLS, Sonoma County had exactly 458 single-family homes left for sale as January concluded – 28 percent fewer than the 640 units that were available at the outset of last year. Sellers delivered just 207 new listings to the market during the month – a jaw dropping 45 percent fewer than the year prior - while buyers gained control of another 193 new deals during the period – 27 percent fewer than the previous January and most likely attributed to the dearth of available homes for buyers to acquire. In support of these metrics, completed sales tipped the scales at 308 this last month – 34 percent more than this same time last year.
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 all-time low interest rates driving our markets, the data shows MSI registering 1.5 as of last month – much tighter than the 2.8 reading from last year at this time. This level 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 homes they lost in the Tubbs, Nuns, Kincade and Glass 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 49 homes reported for sale as January ended – 33 percent fewer than a year earlier. This region experienced the addition of just 10 new listings during the period while buyers garnered accepted contracts on 14 more properties – 22 percent less than last year. Sellers awarded keys to another 25 new homeowners confirming last month’s market dynamics while seeing MSI stabilize at 2.0.
Healdsburg witnessed 16 new listings arrive to the market in January while buyers promptly snapped up nine homes in new deals. Sellers closed out 15 transactions leaving this submarket with 50 homes for presentation to buyers in February. The sum of demands has left this region with an MSI now at 3.3.
Petaluma’s Westside continued its hot pace with only 17 homes remaining for sale by month’s end, inclusive of the six new offerings brought forth during the period. Sellers found their way into 18 new contracts – 64 percent ahead of last year - while buyers completed purchases on 22 additional dwellings - leaving this region with only a 3-week supply of homes as MSI plunged deeper to 0.8.
Petaluma’s Eastside is registering a record for supply of inventory that can now be measured in weeks not months, to be precise 2 weeks! As the first month of 2021 wrapped up, there were just six available homes for buyers to select from - which is inclusive of the 10 additional offerings unveiled by owners during the period. Home shoppers placed 11 more dwellings into contract while sellers completed another 17 transactions – 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 – we anticipate a rise in values to ensue this year.
With buyers leaning in to offer more for their next home, Sebastopol sellers were lured into delivering just 14 new listings in this inaugural month. Buyers gained control of another 14 deals during the period while sellers closed out 13 more sales leaving only 31 single-family homes available for buyers to peruse in the new year while showcasing an MSI of 2.4.
Historically, our real estate markets move with modest gains and trivial losses during most years – mostly the former kind. That said, about every decade we have experienced periods with colossal gains in property value appreciation in one or two consecutive years that in hindsight leaves us wondering how we did not see that coming. These exceptional years are not felt in all markets across the nation, though they have become commonplace in California. Are we