Not Enough to Go Around

As the rest of the Bay Area is rediscovering the beauty and desirability of where we live it seems we are running low on sellers. That coupled with the loss of nearly 6000 housing units to natural disasters over the last three years has us where we are today.
 
According to BAREIS MLS, Sonoma County had exactly 491 single-family homes left for sale as March concluded – 27 percent fewer than the 668 units that were available as our markets entered the initial days of the pandemic last year. Sellers delivered just 441 new listings to the market during the month while buyers gained control of another 588 new deals during the period – 112 percent greater than the previous March. In support of these metrics, completed sales tipped the scales at 427 this last month – 42 percent more than this same time a year earlier.
 
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 extremely attractive interest rates driving our markets, the data shows MSI has fallen to 1.1 as of last month – much tighter than the 2.2 reading from last year at this time. 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 and Glass Fire 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 85 homes reported for sale as March ended – 17 percent fewer than a year earlier. This region experienced the addition of 42 new listings during the period – 19 percent off last year - while buyers garnered accepted contracts on 62 more properties – a massive 139 percent above the prior March as well as 56 percent more than just last month. Sellers awarded keys to another 42 new homeowners confirming last month’s market dynamics while seeing MSI tumbling downward to 2.0 for the period.
 
Healdsburg witnessed 28 new listings arrive to the market in March while buyers promptly snapped up 32 homes in new deals – yes, that is 220 percent greater than last year! Sellers closed out 29 transactions – 164 percent more than in 2020 - leaving this submarket with 53 homes for presentation to buyers in April. The sum of demands has sent this regions MSI into freefall as it stood at 1.8 by months end.
 
Petaluma’s Westside continued its hot pace with only 19 homes remaining for sale by month’s end, inclusive of the 18 new offerings brought forth during the period. Sellers found their way into 33 new contracts – 136 percent ahead of last year - while buyers completed purchases on 21 additional dwellings – compressing this regions’ already very tight MSI down to 0.9 – essentially not even one month’s supply of available homes.
 
Petaluma’s Eastside is registering a record for supply of inventory that is still being measured in weeks not months - to be precise 1.5 weeks! March wrapped up with just nine available homes for buyers to select from - which is inclusive of the 23 additional offerings unveiled by owners during the period. Home shoppers placed 39 more dwellings into contract while sellers completed another 27 transactions – no surprise as this market continues to capture interest due to is relative affordability in comparison to surrounding markets let alone the Bay Area. With less than a single month’s supply of homes being available – MSI at 0.3 – we remain steadfast in our beliefs that values will rise to find their balance with demand during this year.
 
With buyers leaning in to offer more for their next home, Sebastopol sellers were lured into delivering 20 new listings in March. Buyers gained control of another 29 deals during the period while sellers closed out 30 more sales – 150 percent ahead of last year at this time - leaving only 20 single-family homes available for buyers to peruse in April – an all-time low - while showcasing an MSI of 0.7 which is the equivalent of a three-week supply of available homes.
 
With the arrival of more affluent buyers from core urban markets around the Bay Area, the trends are suggesting we should expect a rather unique once-a-decade type event that propels our market into a new realm of desirability and values.

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