Real Estate Market - Stronger Than Last Year
With Spring now feeling springier there is a palpable new energy that has returned to our markets, having come through a record cold and wet lengthy winter that kept many on the sidelines.
According to BAREIS MLS, with March in the rearview mirror, the data points indicate that Sonoma County buyers successfully contracted to purchase 303 single-family homes – 38 percent fewer than the prior year. Property owners delivered 227 new offerings during the month – off 58 percent from a year earlier along with being another new historical low for this period – while buyers managed to complete purchases on 265 dwellings – 35 percent less than a year ago.
With April now upon us, buyers will be surveying the 376 available homes remaining in Sonoma County – 50 percent fewer than in 2022 - along with the debut of new ones, and making determinations for themselves as to purchasing now, or not, and this will show up in a common market measure - the absorption rate. March left us with this metric reading at 71 percent in Sonoma County – which is 39 percent greater than last year at this time – indicating buyers are putting last year’s perfect storm of challenges behind them now and determined that the 10 percent retrenching in prices locally, coupled with long-term interest rates anticipated to trend lower, are the sign to jump back into the process of acquiring their new home.
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, 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.
Marin property owners introduced 125 new single-family offerings last month – 59 percent less than a year earlier – with buyers absorbing 149 homes in consummated contracts. Sellers brought finality to 118 transactions during the period – 42 percent fewer than in 2022 - leaving the entire region with just 161 dwellings available for buyers to peruse this month – 60 percent lower than last year at this time along with being another new all-time low inventory mark for the period. Marin’s absorption rate stabilized at 73 percent in March - 43 percent greater than this reading just a year ago indicating that this market may be poised for recapturing even more of its value lost over the last year.
Napa County’s markets have not seen the same uptick as those above – yet – but now appear to be kicking into gear. March witnessed the release of only 78 new offerings to the marketplace – 55 percent less than twelve months earlier – leaving inventory levels in the shallows once more with merely 184 homes for home seekers to peruse in April – off 32 percent from this same time last year. Buyers placed 81 new deals into escrow – 40 percent less than last year – while closed transactions tipped the scales at 77 during the month allowing the absorption rate to rise from near balanced to 41 percent – indicating that this market is now more firmly in control of property owners and gaining momentum.
As January pointed to new robust demands from buyers before fading in February with additional interest rate increases and regional bank worries, we are now seeing March and the yet to be released data for April indicate a follow through of similar activity experienced in January. This “choppiness” is to be expected most notably at market transition points. Get your personal check-up now by reaching out to get a handle on the market and how it relates to your own situation.
Stay up to date on the latest real estate trends.