The sales of any product or commodity are limited to the availability of inventory and with retarded levels of supply plaguing our real estate markets we can only extrapolate from this that the total volume of transactions will shrink in our region comparatively to recent years.
According to BAREIS MLS, Sonoma County had exactly 342 single-family homes left for sale at the close of January – 41 percent fewer than this same period twelve months ago and another new all-time low. Sellers delivered 157 new listings to the market during the month – 60 percent less than in 2022 - while buyers garnered control of another 183 new deals – 38 percent off from a year earlier due to higher interest rates, lower inventory levels and the seasonality of our wintertime marketplace. In support of these metrics, completed sales tipped the scales at 162 for the period – 37 percent fewer than the prior 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 risen to 2.1 in January – still indicative of a seller’s market though with buyers being able to effect greater influence on the terms of a sale.
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 merely 40 homes reported for sale as January concluded – 49 percent less than this same period a year ago. This region experienced the addition of 13 new listings during the month while buyers garnered accepted contracts on 15 more properties. Sellers in the valley awarded keys to 22 new homeowners – 19 percent off from a year earlier – allowing MSI to get squeezed down to 1.8 – its tightest reading in over a year.
Healdsburg witnessed just 11 new listings arrive to the market last month – 50 percent fewer than a year earlier. Buyers absorbed five homes in new deals while sellers closed out another nine transactions leaving this submarket with 23 homes for presentation to buyers in February, along with an MSI steadying at 2.6.
Petaluma’s Westside attracted only seven new sellers in January which caused available inventory to fall to 23 homes for buyers to select from by months end – a historical low, again. Home seekers grabbed 13 new deals in the period while sellers closed out eight purchases leading to an MSI of 2.9.
Similarly, Sebastopol wrapped up the period with 21 available homes for buyers to consider inclusive of the 10 additional offerings brought forth in the period – setting a new record low here as well. Home shoppers placed 10 more dwellings into contract while sellers completed 10 sales causing MSI to tighten to 2.1.
Windsor property owners delivered only eight new listings in January while buyers captured 10 deals during the period. Sellers closed out 12 more transactions leaving just 12 single-family homes available for buyers to peruse in February while highlighting an MSI of 1.0.
We do however expect to see new inventory come into the market as 2023 continues to open up. It will remain to be seen if we can achieve more elevated levels of supply this year than all last year or continue to set new record lows for available housing opportunities. If we fall short of last year then we must expect values to hold, if not experience even an increase from where they are now.
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