One of our nation’s most expansive historic decades, the 1920’s, was one filled with enthusiasm, the rise of immense ingenuity and industrialization which lead to prosperity throughout our country as well as Europe – at least until 1929. As we break into this new decade how will our world take shape? Will we continue with our historic economic expansion? What new innovations will drive our region or the world? Who will lead us and what great things will we accomplish?
One thing is for sure currently, our real estate markets will continue to evolve. The North Bay region typically sees definitive growth in inventory as each new year unfolds with peaks typically showing in spring and summer months while valleys appear in fall and winter. According to BAREIS MLS, 2019 closed out with thunderous activity showing encouraging signs for a stronger than usual January opening. December data points indicate that Sonoma County buyers successfully contracted to purchase 245 single-family homes – seven percent greater than a year earlier. Property owners provided merely 122 new listings to the market during the period – 33 percent less than the prior year when 282 came available - while transactions were completed on 296 dwellings over the last 30 days leaving 639 available properties to carry over into the new year. The cumulative data is once again telling us that our housing market is tightening with regards to new inventory which typically foreshadows expanding value for well marketed, properly priced new listings as noted with a steady and heightened absorption rate of 46 percent.
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 rapidly, 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 County’s marketplace is confirming a similar path though with significantly stronger metrics. December showcased merely 11 new offerings – an alarming 78 percent fewer than last year – with buyers quickly latching onto 72 newly consummated deals. Sellers closed out 139 transactions during the period leaving the entire county with 149 homes as offerings for buyers to select from – essentially slapping home seekers across the face as to say, “wake up and get engaged”. The dearth of new offerings coupled with intense interest has shot the absorption rate up to 93 percent – alarmingly high, maybe a bit seasonal while this certainly bodes well for sellers.
Napa County’s markets - which have technically shown signs of entering a balanced market in five out of the last twelve months - has swung back in favor of sellers this month with the absorption rate settling at 33 percent as we roar into 2020. December brought only 26 new listings to market – 54 percent less than the prior year - with buyers promptly absorbing 56 properties into new deals during the month. Napa sellers managed to complete the sale of 83 single family homes, leaving 252 available homes for buyers to peruse in January.
This time of year typically pulls people towards a focus on their health and planning for the coming twelve months. We call this a short-term focus and, though very important, it must be wrapped in long term goals so it can lead you to the future you are designing for yourself. Coaching clients through this process is often what we do, so reach out….and, say welcome to the rest of your life.