Real Estate Markets Affirm New Cadence

Real Estate Markets Affirm New Cadence
For the fifth month in a row, the greater Santa Rosa metro region has seen exacerbating activity from buyers, while sellers continue their market hold out. This increased buyer demand is being reflected
now by the full recovery of values in the region from their previous high in May of 2022. Within the metropolis of Santa Rosa, according to BAREIS MLS in the midst of Spring, the data from May
points to a marketplace firmly indicating a voracious demand with only 180 single-family homes remaining for sale in the city and its environs – 33 percent less than this same time a year ago. Buyers
laid claim to 148 single-family homes during the past month – a rate 20 percent less than a year earlier - while the entire municipality introduced 136 new listings to the market in May – 37 percent fewer than in 2022. The most recent period found Seller’s handing over keys on another 131 completed sales – 24 percent behind last year.

This measurable market shift is affirmed by Santa Rosa recording a Months’ Supply of Inventory (MSI) level at 1.4 – further corroboration that buyers have ceded their control once again to sellers in the
marketplace while establishing the fifth data point echoing this uptick in buyer demands being experienced on main street since the opening of the new year; and, with June now looking to establish a
sixth consecutive month. 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
57 single-family homes in May – 35 percent fewer than this same period a year ago. The supply of homes was met with more active demand during the period as there were merely 95 dwellings for home
seekers to consider by months end – 19 percent lower than the depths we were experiencing at this time last year. Buyers still managed to absorb 58 homes into new contracts with sellers receiving closing
checks on another 36 properties – resulting in MSI steadying at 2.6 – keep in mind that in this sector some of the new listings posted are offerings for homes to be built yet so that adds some unrealistic
bulk to what is really available to purchase now, unlike most other sub-markets in the region.

Even more fervently in demand, Southeast Santa Rosa saw the supply of listed properties rest at 41 by month’s end – 15 percent less than just a year earlier. This submarket debuted 24 new listings in May
while buyers garnered accepted offers on another 27 additional dwellings. This coveted corner of the city experienced 31 formal transfers in the period culminating in an MSI of 1.3.

The quantity of available listings in Oakmont has dwindled to just eight at the end of May, which is inclusive of property owners launching 15 new offerings during the period. Buyers inked out 14 new deals while sellers completed 19 transactions during the period, allowing MSI to plummet further to 0.4 – the tightest reading in the Northbay marketplace.

Northwest Santa Rosa buyers made advances to gain control of 30 more deals while leaving just 28 single-family homes available for sale at the end of May. Sellers committed 27 additional offerings to the
market while another 35 homes completed the closing process leaving this region with an MSI tightening further to 0.8. Southwest Santa Rosa sellers delivered 13 new offerings to the market while consumers placed 19 more dwellings into contract during the period. Newly minted homeowners captured keys to new doors on the heels of 10 closings, leaving merely eight dwellings available for buyers to view in June while causing MSI to plummet to 0.8.

With the new cadence of the market being affirmed now by five months of data, we shall see if the summer market takes its typical pause in August or if we see further acceleration. For the pace to gain
more steam we will need to see interest rates stabilize or even indicate a downward bias and for sellers to remain sidelined in their beliefs that they have what they want and are unwilling to trade