Smaller government and tariffs: Is this what real estate buyers want?
Smaller Government & Tariffs…Is This What Buyers Want?
Could right sizing the government while instituting tariffs on global trading partners be what the market really wants in the end? It may, though it will take months - if not years - to truly find out how this will shake out. In the meanwhile, this will be putting pressure on interest rates to come down in order to offset fears of worsening economic factors which will encourage more buyers into their demand cycle ahead.
According to BARIES MLS, Sonoma County had exactly 780 single-family homes left for sale at the beginning of April – 58% greater than in 2024. Sellers delivered 295 new listings to the market during the month – 34% less than in 2024 as well as being another new all-time low - while buyers garnered control of 400 new deals – 36% more than a year ago. In support of these metrics, completed sales stood at 253 for the period – 14% fewer closings than last year at this same time.
The continued pace of the markets can be measured by the months’ supply of inventory (MSI) and, with buyer activity continuing to increase we anticipate the marketplace to remain in favor of those that own property even though this metric steadied at 3.1 in March – affirming the most recent trends that our markets will not slip towards a balanced one and will likely remain as they have since 2011, a sellers’ market, with a greater percentage chance of 2025 being a year that showcases a bounce upward in available listings as well as more closed transactions.
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.
From a sellers’ market to a balanced one, to a buyers’ market and now back to a balanced reading, the Town of Sonoma - which submarket includes properties throughout Kenwood and Glen Ellen - reported 120 homes for sale as March concluded – 46% higher than last year. This region experienced the addition of just 23 new available dwellings during the month – 52% less than in 2024 - while buyers garnered accepted contracts on 37 more properties. Sellers in the valley awarded keys to 28 new homeowners in the period – similar to last year during this same period and the reason this market is back into a balance with MSI at 4.3 with anticipation of this swinging back into a sellers’ market based upon forward looking metrics.
Healdsburg witnessed just 16 new listings debuting in the market last month, 58% fewer than a year ago. Buyers absorbed 24 homes in new deals while sellers closed out 15 transactions leaving this submarket with 69 domiciles for presentation to buyers in April – 30% above year ago levels - culminating in an MSI reading of 4.6 – denoting a balanced market is once again in play.
Sebastopol wrapped up the period with 31 available homes for buyers to consider, which included the 12 new offerings from property holders in March. Home shoppers placed 16 more abodes into contract while sellers completed 9 sales, allowing MSI to rise to 3.4 – still a sellers’ market.
More southerly, Petaluma remains hot with buyer activity allowing sellers to continue to hold the greatest influence while only releasing 30 new listings to the market in March thereby leaving available inventory at 62 homes for buyers to select from in April. Home seekers latched onto 40 new deals in the period while sellers closed out 33 more purchases pressuring MSI to come in at 1.9 for the period – a market where sellers are certainly still setting the terms for each sale.
March’s data - while mixed - still points to rising sales and rising inventories, which is exactly what our marketplace needs in order to create commerce and the ensuing flow of funds to spread throughout our economy. Expect choppy waters ahead and realize change typically gets messy in the middle while on the way to better.
Photo credit: Yoav Aziz on Unsplash
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