Say Yes, To Owning…Your Life!
As the Federal Reserve continues to force markets to normalize through its mechanism of increasing interest rates thereby making it more costly to transact on most anything you own as an asset or consume as a citizen, the marketplaces for stocks, bonds, real estate, automobiles, computers, food & gas are working through their own processes of recalibrating their supply and demand equilibriums while testing economic elasticity levels along the way.
According to BAREIS MLS, September’s data points indicate that Sonoma County buyers successfully contracted to purchase 305 single-family homes – 46 percent fewer than last year at this time. Property owners delivered 279 new offerings during the month – off 43 percent from last September – while buyers managed to complete purchases on 319 dwellings – 41 percent less than a year ago – showcasing the confluence of both historically low inventory levels and the impact that higher interest rates are making on buyers in the marketplace while further exemplifying the change in market conditions that have taken hold so abruptly.
As Autumn kicks-off with October now upon us, buyers will be surveying the 665 available homes – 30 percent fewer than in 2021 - remaining in Sonoma County, 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. September left us with this metric reading at 48 percent in Sonoma County – still off the charts high.
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 County’s market saw inventory rebound this past month. Marin property owners introduced 160 new single-family offerings in the period – though still 31 percent less than a year earlier – with buyers absorbing 157 homes in consummated contracts. Sellers brought finality to 147 transactions during the period - 34 percent fewer than in 2021 - leaving the entire region with 323 homes available for buyers to peruse in October – 15 percent lower than last year at this time. Marin’s absorption rate fell to 46 percent in September - still twice the rate of what we call “high” – which could be foretelling of sellers ceding some of the dominance of control they have had over the markets during the last three years.
Napa County’s markets are having results in-line with the balance of the Bay Area as well. Available monthly inventory at the end September stood at 271 units. Sellers managed to deliver just 73 new offerings to the market in the period while buyers placed 79 new deals into escrow – 35 percent fewer than last year. Home sellers closed out another 76 sales during the month allowing the absorption rate to falter to 28 percent – which could be indicative of this market approaching normalization.
Since change is the constant we know - though do not always enjoy - we will collectively recalibrate our own economies in tandem with finding our personal equilibrium within our worlds and what we value. Each finding our own way based upon the importance of all the things we need or want in this life. The key to this is knowing that you get to choose while you participate in the outcome, thereby understanding you retain control over your life, not the Federal Reserve or some random company. So now is not the time to make excuses, now is this time you have…live a good life!
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