Interest Rates Just Got Sweeter

Interest Rates Just Got Sweeter

With the marketplace already having adjusted for what just happened this week when the Federal Reserve lowered its Fed Funds Rate – the rate that banks within the system get charged for borrowing – buyers active in purchasing have been securing new loans as low as 4.95 percent once again.

Within the metropolis of Santa Rosa, according to Compass, August’s data points to a marketplace executing on expected trend line levels and we suspect buyer activity to continue to increase over the coming months. Sellers debuted just 124 new single-family homes in August – 21 percent fewer than last year and another all-time monthly low while the inventory of available homes in the greater Santa Rosa metro region at the beginning of September stood at 310 – 33 percent greater than in 2023 – meaning that buyers may have opportunities to fill their order requests in the coming months. Home seekers laid claim to 147 single-family homes during the past month – 34 percent more than last year at this same time – while Seller’s handed over keys on another 138 completed sales – six percent ahead of the 130 dwellings that traded just twelve months prior. 

Santa Rosa recorded a Months’ Supply of Inventory (MSI) level of 2.2 – continuing to affirm that sellers are exerting more influence on the marketplace than buyers. 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.

Northeast Santa Rosa – the North Bay’s broadest submarket - saw the introduction of 41 single-family homes in August – 20 percent fewer than this same period a year ago. The supply of homes was met with increased demand as there were 148 dwellings for house hunters to consider by months end – 27 percent more than during the same period last year. Buyers managed to absorb 51 homes into new contracts – 42 percent ahead of just a year earlier - with sellers receiving closing checks on another 42 properties – three less than in 2023, highlighting a tighter MSI of 3.5 now. Keep in mind that in this submarket some of the new listings posted are offerings for homes under construction, which adds some unrealistic carryover inventory to what is actually available to purchase now, unlike most other sub-markets throughout Sonoma County.

Southeast Santa Rosa saw the supply of listed properties rest at 55 as September opened – 22 percent more than just a year earlier. This submarket debuted 23 new listings in August – 21 percent behind last year’s figures - while buyers garnered accepted offers on 28 additional dwellings – 33 percent ahead of a year earlier. This coveted corner of the city experienced 23 closings in the period resulting in MSI of 2.4.

Oakmont, a sprawling active adult community with over 4,700 residents itself, has been experiencing exceptional demand from buyers though sellers responded with a very modest 10 new offerings in August. Buyers jumped in and grabbed 15 new deals while sellers closed out 20 more sales leaving this region with 32 available homes for buyers to pursue in September along with an MSI that that reversed direction back to 1.6.

The region’s most competitive submarket, Northwest Santa Rosa, was buoyant with activity. In August, buyers advanced to control 39 more deals while leaving another 47 single-family homes available for sale at the beginning of September. Sellers committed 36 new offerings to the market in the period while 36 additional homes crossed the finish line, tightening MSI further to 1.3.

Southwest Santa Rosa’s activity kept moving along as consumers placed 14 dwellings into contract during the period just as sellers handed over the keys to 17 new homeowners leaving 28 dwellings for buyers to view at the outset of September and a market experiencing an MSI of 1.6.

Autumn looks to remain as fervent as it has been predicted, the question will be to what degree does it eclipse prior seasons when it comes to the final tally of transactions? The next 60 days will tell us. To this practitioner, the market is teeming with new calls and renewed interest from the buying public to execute their plans of purchasing a new home. Interestingly this also happens to be the season where we typically have fewer sellers joining the market and even some, that have not sold yet, deciding to remove their properties from the open marketplace as well.