This time of year typically sees our market activity cycling up as the holidays, super bowl and various other distraction have left our horizon allowing the business of real estate to be back, front and center.
The North Bay region typically sees definitive growth in inventory as each new year unfolds with peaks typically showing in spring and summer months while valleys appear in fall and winter. According to BAREIS MLS, 2020 is following through on an early spike in activity that we witnessed as last year was ending. This January’s data points indicate that Sonoma County buyers successfully contracted to purchase 285 single-family homes – 20 percent greater than a year earlier. Property owners provided just 245 new listings to the market during the period – 23 percent less than the prior year when 320 came available - while transactions were completed on 217 dwellings over the last 30 days leaving 639 available properties to carry over into the new year.The cumulative data is once again telling us that our housing market is tightening with regards to new inventory which typically foreshadows stable to expanding values for well marketed, properly priced new listings affirmed by a steady and heightened absorption rate of 34 percent.
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 rapidly, thereby increasing the odds that an owner will sell a property in a shorter period. Conversely, an absorption rate below 15 percents indicative of a buyer’s market, meaning homes are selling more slowly.
Marin County’s marketplace is confirming a similar path though still with significantly stronger metrics. January showcased 67 fresh single-family offerings – an alarming 57 percent fewer than last year – with buyers quickly latching onto 76 newly consummated deals. Sellers closed out 73 transactions during the period leaving the entire county with 153 homes as offerings for buyers to select from in February. The dearth of new offerings coupled with intense interest has placed the absorption rate at 48 percent – which means waiting for something better is not the tact you should be taking with interest rates where they are and inventory – or lack of – where it is.
Napa County’s markets - which have technically shown signs of entering a balanced market in four out of the last twelve months – is still favoring sellers this month with the absorption rate hovering at 26 percent. The last 31 days brought only 57 new listings to market – 40 percent less than the prior year - with buyers promptly absorbing 47 properties into new deals during the month. Napa sellers managed to complete the sale of 58 single family homes, leaving 227 available homes for buyers to peruse this month – 10 percent less than the prior year.
So, now it’s time to say hello to the markets again… This weekend should kick off a series of weeks where we will see greater engagement and follow through from buyers in the region, which inevitably leads to new data points in our future.