If it is, then buyers in our marketplace are becoming less virtuous. Having just experienced a year like no other, the market is growing impatient with the lack of supply being delivered. Anticipating another long year of pandemic conditions and being given liberties from their employers to work remotely now into 2022, the surge of demand from buyers for larger homes on bigger lots with more self-contained amenities is as real as ever.
According to BAREIS MLS, January’s data points indicate that Sonoma County buyers successfully contracted to purchase 193 single-family homes – 27 percent fewer than just a year earlier though primarily due to the lack of available inventory. Property owners delivered 207 new listings to the market during the period – 45 percent less than last January - while the County saw a stunning, and trend affirming, 308 sales reach fruition by months end – 34 percent greater than a year ago and taking the floor out of the remaining available housing stock in this region. The compression within our markets is easily understood by realizing that the spike in buyer demands coupled with reluctant seller’s over time creates a chasm that inevitably forces prices higher to tempt sellers to market. This immense activity is causing available inventory to zoom off the shelves while less is being restocked, leaving just 458 single-family homes to carry over into February – a stunning 28 percent fewer available listings than in 2020 and at an even lower level than the all-time low seen just the month before. This torrent of activity has established one of the Bay Area’s highest absorption rates of 67 percent – only to be outpaced by the county sitting between wine country and the core Bay Area.
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.
Marin County’s marketplace is running even hotter than its neighbor to the North. January showcased just 106 new single-family offerings – 17 percent fewer than a year earlier - with buyers promptly absorbing another 106 homes into consummated contracts – 17 percent greater than in 2020 – further echoing the chasm referenced above. Sellers closed out 140 transactions during the period - compared with 91 last year at this same time - leaving the entire region with only 139 homes available for buyers to peruse this month. Marin’s extreme pace indicates an absorption rate of 101 percent – providing further evidence of the continued pressure being created by the deurbanization movement away from the core Bay Area metropolises.
Napa County’s markets are benefitting from the trends expressed above as sellers managed to deliver only 55 new homes to market this last month – 46 percent fewer than in 2020. Buyers rushed in to grab 52 new deals while sellers closed out a remarkable 69 sales in the period, further tightening the already “hard to find a home marketplace” and leaving this region with just 188 dwellings available as we move into February. This stint of activity is showcasing a 37 percent absorption rate and further denotes a supply shortened market ahead.
Expect the immense demand for homes from buyers to continue while possibly even gaining more momentum as we roll through the first half of this year. Yes, that means we are up at 4:30am working to make it happen for our clients as the early bird gets the home these days.