Another banner month of positive activity showcasing a stronger demand for housing - much stronger than last year – is now creating a definitive trend line. Having just passed over the second anniversary of the firestorms that besieged the North Bay, we are starting to see what we anticipated as a significant shift in consumers demands and the follow through of subsequent actions being taken.
The 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, September data points indicate that Sonoma County buyers successfully contracted to purchase 453 single-family homes – the most at any point over the last 12 months and well above the 387 that went into contract last year at this time. Property owners provided 383 new listings to the market during the period – 11 percent less than the prior year where 428 new listings came available - while transactions were completed on 392 dwellings over the last 30 days leaving 1129 available properties to carry over into October. The cumulative effect is still indicative of a market strengthening from last Fall with a steady and resurgent absorption rate of 35 percent – further affirming the sluggishness witnessed in 2018 has been abated by lowered interest rates and renewed requirements from buyers.
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. September showcased 211 new offerings – nine percent fewer than last year – with buyers quickly latching onto 214 newly consummated deals. Sellers closed out 157 transactions during the period leaving the entire region with 465 homes as offerings for buyers to select from in October and further encouraging home seekers – still with an elevated absorption rate of 34 percent - to gain control of their new home ahead of further price increases.
Remaining in cadence with the balance of the North Bay - though still at a less intensive rate - Napa County’s markets which were technically in balance six months ago have dipped their toes back into a seller’s market once again. September brought 108 new listings to market – 15 percent less than the prior year - with buyers promptly absorbing 125 properties into new deals during the month. Napa sellers managed to complete the sale of 115 single family homes, leaving 438 more for the markets to ponder in October while causing the absorption rate to steady at 26 percent – a reading that is supportive of firmer pricing.
In a season where we typically expect a decline in metric’s we have been seeing quite the opposite in our regional housing markets. Buyers armed with better tools in the name of interest rates and an economy that continues its longest expansion in recorded history are placing their bets on housing and securing their future by controlling their long-term costs while fulfilling their dreams of ownership. Dream big…we will show you how.