Robert Eyler – esteemed economist at Sonoma State University and one or our prized local resources – has just stated that for the foreseeable next three years our economy is expected to continue its longest expansion period in history. Now, couple that with the underlying perception that we should see even better interest rates this year, and you have a real estate market that looks very buoyant.
The Santa Rosa metro region is shifting to accommodate the new market dynamics that have been thrust upon it as the traditional “bell curve” of activity may be in process of being reshaped while the markets work to sort out the loss of 5,334 homes along with the reemergence of these homes and the lives that once occupied them. According to BAREIS MLS, now that January has concluded, we find the marketplace building on its current momentum with only 269 single-family homes remaining for sale in the city and its environs – 13 percent greater than this same time a year ago – coupled with an expanding level of activity as 126 single-family homes found their way into pending contracts during the past month – 26 percent more than last January.
The entire municipality introduced 131 new listings to the market during the month while the most recent period also found Sellers handing over keys on 101 completed sales at a median value of $617,000 - leaving Santa Rosa with its’ Months’ Supply of Inventory (MSI) at 2.7 with expectations of getting tighter.
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 generally indicative of a balanced market, with lower numbers increasingly favoring sellers and vice versa.
Getting down to the underlying specifics, Northeast Santa Rosa saw the introduction of 53 single-family homes in January – many just in the process of being built which means this inventory, though ghosting its way to market, will not be transactable for several months and in some cases even a year. The supply of homes was met with solid absorption during the period as there were only 124 dwellings for home seekers to consider by months end. Buyers embarked on 33 newly initiated escrows – up 22 percent from the prior year - while sellers received closing checks on another 40 properties at a median value of $748,000 - affirming a steadied MSI of 3.1. It should be noted that as more new homes get built we should see all these metrics expand as this submarket will likely have unique characteristics to it more so than the balance of the city or county – at least until it finds its new maturity level.
Southeast Santa Rosa saw the supply of available properties contract further to 38 by months end. This submarket debuted just 15 new offerings in January – 55 percent fewer than the prior year - while buyers garnered accepted deals on 22 more abodes. This coveted corner of the city experienced 15 formal transfers of title at a median value of $620,000 – allowing the MSI to rest at 2.5 – signaling a market working to cajole sellers into it.
Oakmont saw only 15 willing sellers deliver new offerings in January boosting total available inventory to 38 by the end of the month. With clarity and resolution of the golf club ownership in the past, buyers found their way to acceptances on 18 new purchases – near the twelve-month high - while sellers concluded 10 transactions during the period at a median value of $655,000. The activity level indicates a market that has shifted – though sporadically - from a seller’s market to one that is in balance, and in the case of this month’s data, hanging on the cusp of that with MSI registering 3.8.
With inventory down 17 percent and newly pended sales up 48 percent, Northwest Santa Rosa witnessed 40 new offerings this past month with buyers quickly absorbing 37 of those into accepted deals during the period. Sellers completed the sale of 21 domiciles – at a median value of $545,000 - leaving this submarket with 46 available homes to roll into February - further affirming the broader marketplace demands with MSI hanging at 2.2.
Southwest Santa Rosa had merely eight new properties make their way to market in January, and with buyers promptly gaining control of 16 homes in new agreements, this submarket was left with only 23 houses in play for February. Sellers closed out 15 escrows during the period at a median value of $520,000 allowing this region to wrap up the month with an MSI of 1.5.
With the news headlines pointing to slow, steady growth it sets up well for our economy as it abates runaway dynamics which typically can lead to deeper down cycles. This smoother playing field should allow both sides of the buy/sell spectrum to gain meaningful perspective while setting a new floor within our marketplace.