…Not the PPP we were all hoping for. We are running hotter than ever in many different ways. With the Western Region of our country literally on fire, a stormy political climate looking for an end and, of course, the pursuit of a vaccine to help us return to the new normal - we could all use a break. Events as such require us all to grind it out, dig deep and absorb calamity while dealing with the status of our own interpersonal well-being. Yet time and again we see the human spirit rise to the occasion to conquer chaos with care and, in many cases, a selfless act to assist a neighbor, friend or family member through to a better tomorrow.
With summer in our rearview mirror, we continue to see extreme demand levels for housing. According to BAREIS MLS, August’s data points indicate that Sonoma County buyers successfully contracted to purchase 585 single-family homes – 32 percent higher than just a year earlier. Property owners delivered 356 new listings to the market during the period – 25 percent fewer than the prior August – while the County saw a stunning, and trend affirming, 534 sales reach fruition by months end – 33 percent greater than a year ago. This immense activity is causing available inventory to zoom off the shelves, leaving just 650 single-family homes to carry over into September – a stunning 43 percent fewer available listing than in 2019 - and clearly establishing one of the Bay Area’s highest absorption rates of 82 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 percent is indicative of a buyer’s market, meaning homes are selling more slowly.
In lock step with its neighbor to the North, Marin County’s marketplace is confirming a robust path as well. August showcased 198 new single-family offerings with buyers quickly latching onto 247 newly consummated deals – 49 percent greater than in 2019. Sellers closed out 258 transactions during the period leaving the entire region with 287 homes available for sale – 28 percent fewer than last August. Marin’s pace is slightly hotter than Sonoma County as this month’s data indicates an absorption rate of 89 percent – providing further evidence of the deurbanization movement away from the core Bay Area metropolises.
Similarly, Napa County’s markets are benefitting from the trends expressed above with just 97 new homes making their way to market during the period – 38 percent fewer than last year. Buyers jumped in to secure 173 ratified contracts while sellers completed 154 sales during the period leaving this region with 262 homes available to the marketplace as we open the doors to September. This stint of activity showcased a 59 percent absorption rate and, with little in the way of new development to satiate demand, be prepared to see prices escalate in Napa County as well.
Positive People Providing for themselves and others – now that is the PPP we need! The times we live in today are not the worst of times at all. Our world has endured far worse with far deeper loss and bounced back stronger and wiser before – it is just our generations story unfolding before us. The bigger question you need to ask yourself now is, how do you want your story to progress? The challenges before any of us are conquerable and the grit required to survive and even thrive will reveal one’s true character while also setting the table for your future and the story your kids and grandchildren will tell. Stay strong, live well and remain proud.