As summer begins to extend our days and warm our region, so does the continued heightened pulse of our real estate markets.
The Santa Rosa metro region is working to accommodate the demands of the greater Bay Area along with its’ own, and according to BAREIS MLS, having just wrapped up April the data points to a marketplace still absorbing homes at higher than typical seasonal level with only 228 single-family homes remaining for sale in the city and its environs – 24 percent less than this same time a year ago. Exacerbated buyer activity has claimed another 237 single-family homes during the past month – a 204 percent increase from last year - which is more than twice as much!
The entire municipality introduced 191 new listings to the market over the last month while the most recent period also found Sellers handing over keys on 230 completed sales – 92 percent ahead of last year - and we expect these metrics to continue to compress. With the lack of a credible supply of new inventory, the statistics will be artificially hampered due to a significant portion of unsatiated demand going unmet each month as more homes continue to be absorbed while fewer sellers enter the “open” market. This compression is affirmed by Santa Rosa recording its’ Months’ Supply of Inventory (MSI) falling to 1.0 – attributed in good part due to the fundamental shift in population migration from the greater Bay Area along with the cost of money in our current economy coupled with sellers remaining on the sidelines.
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.
Peering deeper into the metrics, Northeast Santa Rosa saw the introduction of 62 single-family homes in April – 10 percent less than in 2020 - with a significant number of these homes being offered for sale that are in the waning months of construction, thus making them hard to transact on due to their unfinished status. The supply of homes was met with enhanced demands during the period as there were only 96 dwellings for home seekers to consider by months end. Buyers embarked on 79 newly initiated escrows – 172 percent ahead of last year - while sellers received closing checks on another 92 properties – 207 percent more than the prior April - culminating in an MSI of 1.0 and would have even been lower had more supply made its way to the markets.
Similarly, Southeast Santa Rosa saw the supply of available properties rise to 39 by the end of last month – still 23 percent less than a year earlier. This submarket debuted just 33 new homes in April while buyers garnered accepted offers on 38 additional dwellings – a stunning 111 percent above last year’s newly ratified deals. This coveted corner of the city experienced 39 formal transfers in the period – 86 percent more than last year – placing further pressure on an already tight market with MSI hanging at 1.0.
Oakmont continues to build momentum as it works to step in line with what the balance of the Santa Rosa metro markets are experiencing. The active adult retirement community witnessed 39 new sellers debuting their offerings in April while buyers showed up in force putting 41 deals under contract – 583 percent ahead of last year and an all-time high. Sellers concluded 31 transactions during the month leaving this niche market with 48 available homes to open with in May along with an MSI registering at 1.5 – indicative of much heavier buyer demand finally showing up in this market as well now.
Northwest Santa Rosa – a market severely hampered by available homes for sale - saw buyers swoop in to gain control of 61 more deals this month leaving just 29 available single-family homes to carry over into May – 51 percent fewer than last year. Sellers committed 43 additional new offerings to the markets while another 43 homes completed the closing process like the month before. This intense activity is holding the MSI under a one-month supply as it hovers at 0.7.
Tighter still, Southwest Santa Rosa buyers completed 18 more deals in April, leaving just 16 homes available for those seeking new dwellings this month. Sellers submitted 14 new listings into the public domain during the period while buyers pledged their paychecks towards 25 accepted contracts causing this submarkets MSI to sink further to 0.6 – thereby confirming the heightened demands of the rest of our region.
It all boils down to homes – even though so personal to each of us – are simply a commodity like gas, food, gold, and the like. This means homes are impacted equally by the supply and demand paradigm as well and as such dictates the resulting rise or fall in value. One thing truer about homes than any other commodity though is that it is not easily replaced or created…it has.