North Bay Markets to See a Turn Upwards

North Bay Markets to See a Turn Upward

Even though we anticipate this year’s sales volume to be on par with 2023 – which matched levels not seen since the early 1990’s – we are experiencing what appear to be signs that 2025 will bring about a new trend off this bottom in both the number of homes sold and the corresponding prices they will be trading at.

According to BAREIS MLS, with November’s data now tabulated, we find our markets still reporting better activity and results as each new month turns over. The data points indicate that Sonoma County buyers successfully entered agreements to purchase 263 single-family homes in November – 12% ahead of last year at this time. Property owners delivered a meager 189 new offerings during the month – 19 fewer than a year earlier along with being another new historical low for the period. Buyers managed to complete purchases on 282 dwellings – 20% greater than the 236 units that transferred ownership last year at this time.

With December in play now, buyers will be surveying the 744 available homes remaining in Sonoma County – an encouraging 20% bounce above the 30+year low we experienced last year at this time. With the year winding down, buyers will most likely endure the typical seasonal distractions, recharge their enthusiasm and drive into next year with reinvigorated aspirations where they will once again resume their assessment of new offerings and whether to purchase, and this will show up in a common market measure - the absorption rate. November’s activity left us once again with a heightened reading of 38% - meaning that unless a robust amount of new inventory shows up that the early buyer will win out with a less stressful process than further ahead in the Spring where we anticipate more heated competition. 

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.

Similarly, Marin property owners introduced only 57 new single-family offerings in November – another all-time monthly low and 46% less than a year earlier. These woefully lacking inventory levels may continue to create a more competitive environment for both new and existing buyers in pursuit of making Marin their home this season as well as through next year. Buyers absorbed 157 homes in consummated contracts while sellers completed sales on 147 dwellings during the period – 10% ahead of last year - leaving the entire region with 263 dwellings available for buyers to peruse this December. Marin’s absorption rate for the month sustained a similar level as it has over the prior two months - 56% – foretelling that buyers will continue to encounter greater competition with each new home presented in the marketplace.

A different scenario is taking place in Napa County where markets remain balanced for the sixth month in a row. November brought the release of 51 new offerings to the marketplace – 10% less than last year – leaving 355 homes available for buyers to peruse in December. Buyers placed 76 new deals into escrow – 18 more than last year – while closed transactions tipped the scales at 65 during the month – just two more sales than in 2023. The combination of new releases coupled with buyer activity has allowed the absorption rate to steady with a balanced reading of 18%.

Over the course 2024, prices initially were flat, then sank 8% off their peak and are now demonstrating signs of recapturing these losses as we close out the calendar year. A solid sign to add to the others when we suggest that 2025 will be stronger in both sales of existing homes and what they cross the finish line at!