Markets Strike Traditional Cadence

Markets Strike Traditional Cadence

As we enter the early days of Spring, we are seeing sellers show up – just in a year over year over year declining fashion. Buyers continue to arise from their winter hibernation as expected and continue to outnumber willing property liquidators.

According to BAREIS MLS, Sonoma County had exactly 420 single-family homes left for sale at the close of February – 10 percent greater than this same period a year earlier. Sellers delivered 194 new listings to the market during the period – 32 percent less than in 2023 and a another new all-time low for the month - while buyers garnered control of another 254 new deals – four percent more than a year ago. In support of these metrics, completed sales tipped the scales at 190 for the period – four percent fewer than the 197 homes sold last February.

The continued pace of the markets can be measured by the months’ supply of inventory (MSI) and, with the Federal Reserve now in a more neutral position, MSI remains flat with the prior months reading at 2.2 – indicating sellers are in control, which has been the case essentially since 2011. 

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.

Getting down to the details in the town of Sonoma, which submarket includes the hamlets of Kenwood and Glen Ellen, there were 63 homes reported for sale as February concluded – 17 percent higher than last year. This region experienced the addition of 21 new listings during the month – another historical low - while buyers garnered accepted contracts on 26 more properties, 44 percent above last year’s demand levels. Sellers in the valley awarded keys to 18 new homeowners causing MSI to elevate to 3.5 – easing back from last month’s solid seller control level of 2.1.

Healdsburg witnessed 14 new listings arrive to the market last month – 17 percent greater than a year ago. Buyers absorbed seven homes in new deals while sellers closed out another six transactions leaving this submarket with 42 dwellings for presentation to buyers in March – 91 percent above year ago levels - culminating in an MSI reading of 7.0, showing this market is riper for buyers to negotiate more firmly at this time. 

Petaluma’s Westside attracted 12 new sellers in February leaving available inventory at 27 homes for buyers to select from by months end. Home seekers grabbed 19 new deals in the period while sellers closed out 12 purchases pulling MSI backwards to 2.3 – which we anticipated from last month’s data would happen.

Sebastopol wrapped up the period with 22 available homes for buyers to consider, which included the 11 new offerings from property owners in February – another historic low for the period. Home shoppers placed 19 more abodes into contract while sellers completed 13 sales, allowing MSI to fall 50 percent to 1.7 for the period.

Less means less of everything in Windsor where property owners delivered 18 new listings in February while buyers captured another 16 deals during the period. Sellers closed out nine transactions leaving only 14 single-family homes available for buyers to chase in March while establishing an MSI of 1.6 for the period – very much a sellers’ market.

Similar to the last several years, we are seeing fewer sellers show up each month establishing a rhythm of depleted offerings while also holding prices stable at worst and, even more so, at a rate of inclination that has defied the corresponding interest rate increases. This shortening of the supply side shows no signs of abating and with rates tipping towards level or even dropping, you would expect this to put more pressure on prices to elevate further, especially as we still see more buyers migrating from the greater Bay Area.