Recalibrating Annual Expectations
Economists throughout the housing industry started off the year predicting we would see sales volume nationwide 20-25 percent higher than the 3.8 million homes sold last year – a 34 year low. They went further to predict when this volume would show up and just adjusted this prediction.
According to BAREIS MLS, Sonoma County had exactly 893 single-family homes left for sale at the close of June – 35 percent greater than this same period a year earlier. Sellers delivered 336 new listings to the market during the month – 21 percent less than in 2023 and a another new all-time low - while buyers garnered control of another 399 new deals – 13 percent more than a year ago. In support of these metrics, completed sales stood at 348 for the period – 11 percent fewer than the 390 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 indicating its intentions to lower rates we may see this metric retreat to tighter readings, though for now, MSI overall in Sonoma County loosened to 2.6 – indicating sellers still remain in control.
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.
Approaching activity readings that are on the edge of being considered balanced, the tony town of Sonoma, which submarket includes properties in Kenwood and Glen Ellen, reported 141 homes for sale as June concluded – 24 percent higher than last year. This region experienced the addition of 37 new listings during the month – another historical low - while buyers garnered accepted contracts on 50 more properties, 22 percent above last year’s demand levels. Sellers in the valley awarded keys to 35 new homeowners allowing MSI to climb to 4.0.
Healdsburg witnessed 13 new listings debuting in the market last month – 46 percent fewer than a year ago. Buyers absorbed 13 homes in new deals while sellers closed out another 11 transactions leaving this submarket with 86 dwellings for presentation to buyers in July – 37 percent above year ago levels - culminating in an MSI reading of 7.8 – lower volumes tend to influence wilder swings in this metric though we still must note that at this level, buyers should have much more influence as to the outcome of a transaction than we have seen in 11 years.
Petaluma’s Westside continues to maintain its highly active cadence as 22 new sellers unveiled their homes in June leaving available inventory at 48 homes for buyers to select from by months end. Home seekers grabbed 29 new deals in the period while sellers closed out another 21 purchases allowing MSI to ease to 2.3 for the month – a market where sellers are certainly still in the driver’s seat.
Similarly, Sebastopol wrapped up the period with 41 available homes for buyers to consider, which included the nine new offerings from property owners in June – another historic low for the period. Home shoppers placed 28 more abodes into contract while sellers completed 22 sales, allowing MSI to tighten once again to 1.9.
Summer has been alive and bustling in the Russian River region with buyer demands as property owners delivered 22 new listings in June while buyers captured another 32 deals during the period. Sellers closed out 25 more transactions leaving 78 single-family homes available for buyers to chase in July while establishing an MSI of 3.1 – still a sellers’ market.
Most real estate sleuths and economists are now prognosticating that we should see about 40 percent of our expected annual volume of sales in the September through November period. They suggest that this is the case due to buyers’ confidence in interest rates becoming more favorable, the presidential election coming to an end and that they also expect to see more inventory than usual during this time of year ahead of us – this amount of transaction volume forecast is more than twice as much than has been historically experienced. That means now should be an important time to update your strategy!
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