Mr. Blue Sky Is Back

Written in 1977 and performed by Rock and Roll Hall of Famer’s, Electric Light Orchestra (ELO), the song is beloved by so many and considered the bands signature recording in their multi-decade existence. Jeff Lynne, lead vocalist and guitarist, was stifled by his ability to write as he was locked away in a Swiss chalet for weeks during an extended, dark winter period then woke one day to a crystal clear image of the Alps and went on to write a dozen of the groups hits in the following two weeks. The sunny vibe that seems to be ever frequent in this tune is so poignantly appropriate for the times we find ourselves in again these days. Along with the blue skies being back in our region, we all hold tremendous hope for the months ahead in progressing towards a cure for COVID and a return to what our new normal will be as we find sizable populations of people looking towards living in new places where they have space to flourish in.
 
According to BAREIS MLS, Sonoma County had exactly 650 single-family homes left for sale as we closed the books on August – 43 percent fewer than this same period a year ago. Sellers delivered 363 new listings to the market during the month – off 26 percent from a year earlier - while buyers gained control of another 594 new deals during the period – 29 percent greater than the prior August - denoting a further widening of the chasm between supply and demand. In support of these metrics, completed sales tipped the scales at 552 this last month – 31 percent greater than in 2019 – continuing to add to the story of deurbanization we are seeing in the greater marketplace with regards to major metropolitan cities and where those populations are seeking out to locate their new households.
 
The continued pace of the markets can be measured by the months’ supply of inventory (MSI) and, with vastly growing demands from buyers in our region - along with all-time low interest rates driving our markets - the data shows MSI registering 1.2 as of last month – even with wildfires in action. This level of liquidity and activity is among the highest in the seven Bay Area counties we track and in some part due to the native demands of households, unique to our region, who are still replacing homes they lost in the Tubbs, Nuns & Kincade calamities.
 
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.
 
Getting down to the details in the town of Sonoma, which submarket includes the hamlets of Kenwood and Glen Ellen, there were 94 homes reported for sale as August concluded – 34 percent fewer than a year earlier. This region experienced the addition of 39 new properties during the period while buyers garnered accepted contracts on 62 properties – a 27 percent jump over last year. Sellers awarded keys to another 65 homeowners confirming last month’s market dynamics while establishing an MSI of 1.4 – as suggested we would see a few months ago.
 
Healdsburg felt a remarkably similar activity spike with only 18 new listings making their way to market in August while buyers promptly snapped up 26 homes in new deals. Sellers closed out 23 transactions leaving this submarket with 68 homes for presentation to buyers in September – 42 percent less than a year earlier. The sum of demands has left this region with an MSI of 3.0 and falling based upon consumer requirements being witnessed already this month.
 
Petaluma’s Westside continued its hot pace with only 30 homes remaining for sale by month’s end – 54 percent less than the prior August - and that included the 11 new offerings brought forth during the period. Sellers found their way to 22 new contracts while buyers completed purchases on 21 additional dwellings - leaving this region with an MSI of 1.4.
 
Petaluma’s Eastside continues to gain momentum as there were just 24 available homes to select from by months end - which is inclusive of the 25 additional offerings unveiled by owners during the period. Home shoppers placed 26 more dwellings into contract while sellers completed 35 transactions – which is not surprising when considering the new population flows into our region. With less than a single month’s supply of homes being available – MSI at 0.7 – expect multiple offers to be the rule here.
 
Similarly, Sebastopol sellers delivered only 24 new listings in August. Buyers gained control of 39 deals during the period while sellers closed out 32 more sales leaving only 32 single-family homes available for buyers to peruse in September – 52 percent fewer than a year earlier - showcasing an MSI of 1.0 with even greater pressure mounting.
 
With our markets awash in exacerbated activity levels, it may be a good idea to take a moment and pull out the old vinyls or just click on Youtube and soak up the lyrics while you pine away for the better days ahead…they will surely come. Hey there, Mr. Blue Sky, we are counting on you, don’t hide away for so long again!

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