Markets Remain Steady on Low Volume

Markets Remain Steady on Low Volume

The recent “ransomware” event with our MLS system along with consumers wrapping up their summering certainly impacted our marketplace in August. Within the metropolis of Santa Rosa, according to BAREIS MLS as we emerge from the “summer pause”, the data from August points to a marketplace firmly indicating a voracious demand with 230 single- family homes remaining for sale in the city and its environs – 10 percent greater than this same time a year ago – though keep in mind our MLS systems was down for about three weeks during the period which had an indelible impact on the data. Buyers laid claim to 111 single-family homes during the past month – a rate 21 percent less than a year earlier - while the entire municipality introduced 104 new listings to the market in August – 31 percent fewer than in 2022. The most recent period found Seller’s handing over keys on another 119 completed sales – 11 percent behind last year as well.

This measurable market shift is affirmed by Santa Rosa recording a Months’ Supply of Inventory (MSI) level at 1.9 – further affirmation buyers have ceded their control to sellers in the marketplace while
establishing yet another data point echoing the uptick in buyer demands being experienced on main street since the opening of the new year; and, now with September looking to establish a ninth
consecutive month.

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. Within the city, Northeast Santa Rosa – the North Bay’s most active submarket - saw the introduction of 32 single-family homes in August – 44 percent fewer than this same period a year ago. The supply of homes was met with more active demand during the period as there were only 117 dwellings for home seekers to consider by months end – 38 percent above the depths we were experiencing at this time last year. Buyers still managed to absorb 41 homes into new contracts with sellers receiving closing checks on another 41 properties – resulting in MSI steadying at 2.9 – keep in mind that in this sector some of the new listings posted are offerings for homes to be built yet so that adds some unrealistic bulk to what
is really available to purchase now, unlike most other sub-markets throughout the County.

Southeast Santa Rosa saw the supply of listed properties rest at 43 by month’s end – 23 percent more than just a year earlier. This submarket debuted 19 new listings in August – 24 percent fewer than last
year - while buyers garnered accepted offers on another 20 additional dwellings. This coveted corner of the city experienced 25 formal transfers in the period culminating in an MSI of 1.7.

No market in the Northbay has been busier than Oakmont with voracious buyer demands coming from outside our marketplace from those looking to acquire their new wine country retirement home. As we close the books on August, there were just 16 available homes for buyers to peruse, which is inclusive of property owners launching 16 new offerings during the period. Buyers inked out 12 new deals while sellers completed 16 transactions during the month, allowing MSI to settle at 1.0.

Northwest Santa Rosa buyers made advances to gain control of 25 more deals while leaving just 30 single-family homes available for sale at the end of August. Sellers committed 22 additional offerings to
the market while another 24 homes completed the closing process leaving this region with an MSI at 1.3. Southwest Santa Rosa sellers delivered 15 new offerings to the market while consumers placed 13 more dwellings into contract during the period. Newly minted homeowners received keys to their new doors on the heels of 13 closings, leaving 24 dwellings available for buyers to view in September while causing MSI to hover around 1.8.

The overall volume of transactions has decreased once again this year, most notably due to the lack of sellers as well as fewer new homes being constructed. While many buyers sit on the sideline awaiting
interest rates coming down, when they do, what will be available for them to purchase? We anticipate whenever interest rates subside that it will kick demand into a higher gear and that likely means we will
see buyers push prices higher as they compete for the few offerings available.