Now What…More of the Same
You know the feeling when you wake up and sense things have changed, then look to associate what that means to your world. Well, we all woke up to the unbridled demands of those seeking a new place to call home in our little region of the world this past month, again.
The Santa Rosa metro region is working to accommodate the demands of the greater Bay Area along with its’ own, and according to BAREIS MLS – one month into the new year - the data points to a marketplace still absorbing homes at higher than typical seasonal level with only 78 single-family homes remaining for sale in the city and its environs – 63 percent less than this same time a year ago and another new all-time low. Exacerbated buyer activity has claimed another 133 single-family homes during the past month – a rate just 13 percent less than a year earlier – truly amazing given the shrinkage of inventory available for purchasing.
The entire municipality introduced 106 new listings to the market over the last month – 48 percent fewer than in 2021. The most recent period also found Seller’s handing over keys on 115 completed sales – seven percent behind last year, though held back due to the lack of inventory for buyers to select from. With the lack of a credible supply, the statistics will be artificially hampered due to a significant portion of unsatiated demand going unmet each month as more homes continue to be absorbed while fewer sellers enter the “open” market – this will eventually point to a false reading of sales shrinking as when sales fall due to lack of supply is a totally different story than when they fall when inventories are bountiful.
This compression is affirmed by Santa Rosa recording its’ Months’ Supply of Inventory (MSI) at 0.7 – which is hovering near the all-time tightest reading from last month. This can be attributed to the fundamental shift in population migration from the greater Bay Area along with the cost of money in our current economy coupled with a lack of property owners interested in leaving the area.
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.
Within the city, Northeast Santa Rosa – the North Bay’s most active submarket - saw the introduction of just 48 single-family homes in January - 33 percent fewer than this same period a year ago. The supply of homes was met with enhanced demands during the period as there were only 37 dwellings for home seekers to consider by months end – 62 percent fewer than the depths we were experiencing at this time last year. Buyers still managed to absorb 60 homes into contracts while sellers received closing checks on another 55 properties – resulting in an MSI of 0.7 – besting last month’s record.
Southeast Santa Rosa saw the supply of listed properties rest at 16 by the end of last month. This submarket debuted 24 new homes in the period while buyers garnered accepted offers on 25 additional dwellings. This coveted corner of the city experienced 15 formal transfers in January steadying this region at an MSI level of 1.1.
Oakmont continues to exhibit similar dynamics as the balance of submarkets in Santa Rosa. Intense buyer activity has left this region with only five homes available for sale as January concluded – by far the fewest at any time historically. Owners launched just eight new offerings in the period while buyers inked out 15 new deals. Sellers concluded another 11 transactions during the month – 38 percent more than the prior year - leaving this niche market with an MSI of 0.5 – a two-week supply of inventory.
Northwest Santa Rosa saw buyers swoop in to gain control of 21 more deals, leaving just 12 available single-family homes for sale at months end. Sellers committed 18 additional offerings to the markets while another 25 homes completed the closing process. This steady, intense activity has been holding MSI under a one-month supply for well over year and, as of this month, it now rests at 0.5 as well.
Southwest Santa Rosa sellers managed to deliver just eight new offerings to the market this past month only to see consumers place 12 more dwellings into contract. Newly minted homeowners captured keys on nine closings, leaving eight homes available for buyers to peruse in February while establishing an MSI of 0.9.
There is something very special about being so connected to your craft that you can sense the tempo changing ahead of being able to view the historical data that affirms it month’s later…some may call this intuition - I call it expertise!
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