A year like no other…Our typical “bell curve” of market activity was altered this last year by the global pandemic which in turn created a demand from urban dwellers for more suburban locales. We experienced a summer with a very brief pause in activity levels – even with wildfires raging and power safety shutoffs at hand – that would have typically caused buyers to pause while they go about their traditional mid-late summer activities, and during the ardently most sluggish period of our annual cycle, mid-December through mid-January, it felt like a modest few days of distraction versus an entire month.
According to BAREIS MLS, December’s data points indicate that Sonoma County buyers successfully contracted to purchase 355 single-family homes – 46 percent higher than just a year earlier. Property owners delivered 179 new listings to the market during the period while the County saw a stunning, and trend affirming, 421 sales reach fruition by months end – 31 percent greater than a year ago. 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 500 single-family homes to carry over into the new year – a stunning 22 percent fewer available listings than in 2019 and a level I have not seen us dipped to in my 30 years of representing sellers and buyers – while also establishing one of the Bay Area’s highest absorption rates of 84 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.
Marin County’s marketplace is running even hotter than its neighbor to the North. December showcased just 57 new single-family offerings with buyers promptly absorbing 146 into consummated contracts – 68 percent greater than in 2019. Sellers closed out 238 transactions during the period - compared with 154 last year at this same time - leaving the entire region with only 154 homes available for buyers to peruse this month. Marin’s extreme pace indicates an absorption rate of 155 percent – providing further evidence of the deurbanization movement away from the core Bay Area metropolises.
Napa County’s markets are benefitting from the trends expressed above with sellers rallying to deliver a mere 38 new homes to market this last month – 22 percent fewer than in 2019. That said, buyers rang the bell on placing 79 new deals into escrow while sellers closed out a remarkable 128 sales in the period – 42 percent above last year - leaving this region with just 183 homes available to the marketplace as we move along into 2021. This stint of activity showcased a 70 percent absorption rate and further denotes a supply shortened market ahead.
The immense activity noted above coupled with the best interest rates on loans ever should continue to propel our markets ahead. If your goal for the new year is to be in your new home, then the early bird gets the worm!
