Rates Weigh on Market Activity
Spring has sprung and the markets are humming, some more so than others.
According to BAREIS MLS, Sonoma County had exactly 493 single-family homes left for sale at the close of March – 28 percent greater than this same period a year earlier. Sellers delivered 293 new listings to the market during the month – 19 percent less than in 2023 and a another new all-time low - while buyers garnered control of another 303 new deals – three percent less than a year ago. In support of these metrics, completed sales stood at 283 for the period, exactly the number of homes that sold at this same time last year.
The continued pace of the markets can be measured by the months’ supply of inventory (MSI) and, with the Federal Reserve hedging its intentions to lower rates while making noise that these current rates may be here for a while longer – at least until clearer signs of inflation being in-check arise. MSI overall in Sonoma County edged to a tighter reading of 1.7 – indicating sellers remain in control, which has remained the case since 2011.
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.
Getting down to the details in the town of Sonoma, which submarket includes the hamlets of Kenwood and Glen Ellen, there were 82 homes reported for sale as March concluded – 32 percent higher than last year. This region experienced the addition of 31 new listings during the month – another historical low - while buyers garnered accepted contracts on 35 more properties, six percent above last year’s demand levels. Sellers in the valley awarded keys to 27 new homeowners causing MSI to contract to 3.0.
Healdsburg witnessed 23 new listings arrive to the market last month – 10 percent greater than a year ago. Buyers absorbed 20 homes in new deals while sellers closed out another 14 transactions leaving this submarket with 53 dwellings for presentation to buyers in April – 66 percent above year ago levels - culminating in an MSI reading of 3.8 – intimating that this market is bouncing towards balance or a neutral reading away from its long standing more seller favorable metrics.
Petaluma’s Westside shows all indicators up and attracted 24 new sellers in March leaving available inventory at 32 homes for buyers to select from by months end. Home seekers grabbed 28 new deals in the period while sellers closed out another 28 purchases sending MSI retreating to 1.1 for the month.
Sebastopol wrapped up the period with 29 available homes for buyers to consider, which included the 15 new offerings from property owners in March – another historic low for the period. Home shoppers placed 13 more abodes into contract while sellers completed 13 sales, allowing MSI to edge upwards to 2.2 for the period.
Windsor has been overwhelmed with buyer demands as property owners delivered just eight new listings in March while buyers captured another 14 deals during the period. Sellers closed out 21 more transactions leaving merely seven single-family homes available for buyers to chase in April while establishing an MSI of 0.3 – very much still a sellers’ market.
With the inconsistency between submarkets being revealed by their MSI ratings above we know that the demands from buyers seem much more fervent for homes in the entry level and move-up marketplace more so than the luxury market where the sensitivity to much higher for longer interest rates seem to be abating the urgency of this buyer pool as they look to put their shopping on the shelf awaiting a more favorable point on the monthly cost scale to reengage.
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