Auld Anxiety WAuld Lang Syne or ith the year starting a new, our market opens with some anxieties for buyers as interest rates settle down - even as they swing in either direction week to week – those in pursuit of homes are finding both that there are less to select from and that there are more people pursuing the properties that become
available.
According to BAREIS MLS, Sonoma County had exactly 431 single-family homes left for sale at the close of 2023 – six percent greater than this same period twelve months earlier. Sellers delivered just 87 new listings to the market during the period – 43 percent less than in 2022 and a new all-time low - while buyers garnered control of another 192 new deals – seven percent less than a year earlier. In support of these metrics, completed sales tipped the scales at 228 for the period – 10 percent off the 253 homes sold in the same period last year.
The continued pace of the markets can be measured by the months’ supply of inventory (MSI) and, with the Federal Reserve aggressively trying to dampen demand by raising the cost of money, MSI has
continued to stabilize, though in December it tightened to 1.9 – very indicative of a seller’s market as we embark on the new year. 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.
Getting down to the details in the town of Sonoma, which submarket includes the hamlets of Kenwood and Glen Ellen, there were 52 homes reported for sale as December concluded – 11 percent higher than last year. This region experienced the addition of just three new listings during the month – another Historical low - while buyers garnered accepted contracts on 23 more properties. Sellers in the valley
awarded keys to 11 new homeowners allowing MSI to expand to 4.7 – essentially indicating a balanced market, though we may see this more as an aberration once the new year unfolds and not a trend.
Healdsburg witnessed only two new listings arrive to the market last month – 80 percent less than a year ago. Buyers absorbed eight homes in new deals while sellers closed out another 13 transactions
leaving this submarket with 43 homes for presentation to buyers in January – which is 87 percent higher than where it was twelve months prior while revealing an MSI swinging back and forth over the course of the year culminating into a reading of getting slammed back to 3.3 for the period – you typically get blown out swings in this metric as the volume of sales can vary greatly each month in this small-market niche’.
Petaluma’s Westside attracted eight new sellers in December leaving available inventory at 27 homes or buyers to select from by months end. Home seekers grabbed nine new deals in the period while
sellers closed out 19 purchases sending MSI to a much more restrictive reading of 1.4. Sebastopol wrapped up the period with 27 available homes for buyers to consider, which included the
five new offerings from property owners in December – another historic low. Home shoppers placed 10 more dwellings into contract while sellers completed another 15 sales, causing MSI to fall to 1.8 for the month.
Windsor property owners delivered just six new listings in December while buyers captured eight deals during the period. Sellers closed out 11 more transactions leaving only 13 single-family homes available for buyers to chase in January while establishing an MSI of 1.2 for the period – still indicating a market
firmly controlled by sellers.
The old times we remember fondly where inventory was much more abundant and the cost to own had gotten ridiculously low by most all comparisons is now looking to settle into a more normal range over this year and will eventually find a buoyancy point that we hover around with regards to interest rates – just keep in mind, better interest rates will not mean much to you if you cannot apply it to anything tangible, like a home.
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