Momentum Improves as January Affirms

Even with mortgage rates floundering in a range, buyers seem to have shaken off the need to postpone their purchases and are now accepting that this is just where housing costs are at present.

According to BAREIS MLS, with all the January data now in, there is trend affirming momentum taking hold. The data points indicate that Sonoma County buyers successfully entered agreements to purchase 246 single-family homes in January – 17% ahead of last year at this time. Property owners delivered 244 new offerings during the month – 7% fewer than a year earlier along with being another new historical low for the period. Buyers managed to complete purchases on 186 dwellings – essentially on par with the 187 units that transferred ownership just a year earlier.

With 2025 in play now, buyers will be surveying the 574 available homes remaining in Sonoma County – a welcomed 42% bounce above the 30+year low we experienced last year at this time. As the new year continues to open, buyers have reignited the home buying process once again and will be assessing the current offerings, as well as new ones, and determine whether to purchase now or not. This will show up in a common market measure - the absorption rate. January’s activity left us once again with an elevated reading of 32% - meaning that unless a robust amount of new inventory shows up without buyers jumping on it, this may create market forces that cause prices to experience an uptick as our year pushes forward.

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, 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 property owners introduced 79 new single-family offerings in January – another all-time monthly low and 31% less than a year earlier. These very weak new delivery numbers will continue to compound the challenges for buyers in Marin County and will continue to create a more competitive environment for both new and existing buyers in pursuit of making Marin their home in 2025. Buyers absorbed 94 homes in consummated contracts -21% ahead of last year - while sellers completed sales on 72 dwellings during the period – 3% behind a year earlier - leaving the entire region with 167 dwellings available for buyers to peruse this February. Marin’s absorption rate for the month slipped to 43% - not unusual for this county at this time of year and still one of the highest amongst the seven Bay Araea counties.

Napa County continues to lag the demands seen in both Sonoma and Marin, and this month saw its’ market fall back into balance – where it spent half of last year. January brought the release of 83 new offerings to the marketplace – 6% less than last year – leaving 264 homes available for buyers to peruse in February. Buyers placed 45 new deals into escrow – just one unit less than last year – while closed transactions tipped the scales at 49 during the period – 20% more than a year earlier. The combination of new releases coupled with buyer activity has pushed and pulled from Seller favor to balance then back over the last 12 months and as of January was at 18% - a balanced reading once again.

Hello February, we expect more sunshine than rain this year in our real estate marketplace…time to get the sunscreen out and prepare your home for a successful introduction to buyers!

Photo by Cytonn Photography on Unsplash