Summer Markets See Waxing and Waning of Activity

Summer Markets See Waxing and Waning of Activity

As we roll into our summertime selling season, we are keeping a watchful eye on whether or not we experience another “soft” summer in contrast to our multi-decade long “Bell Curve” flow where we always had the most sellers and buyers engaged in transactions through the months of June, July and August.

According to BAREIS MLS, Sonoma County had exactly 827 single-family homes left for sale at the close of May – 39 percent greater than this same period a year earlier. Sellers delivered 386 new listings to the market during the month – 22 percent less than in 2023 and a another new all-time low for the period while buyers garnered control of another 421 new deals – 16 percent more than a year ago. In support of these metrics, completed sales stood at 341 for the period, which was five percent fewer than at this same time last year.

The continued pace of the markets can be measured by the months’ supply of inventory (MSI) and, with the Federal Reserve hedging its intentions to lower rates while making noise that these current rates may be here for a while longer – at least until clearer signs of inflation being in-check arise. MSI overall in Sonoma County edged to a tighter reading of 2.4 – with forecasting for this to tighten back down next month. 

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 130 homes reported for sale as May concluded – 19 percent higher than last year. This region experienced the addition of 37 new listings during the month – another historical low - while buyers garnered accepted contracts on 33 more properties, just one more than last year’s demand levels. Sellers in the valley awarded keys to 34 new homeowners allowing MSI to rise to 3.8 – nearly dipping its toes into a balanced reading level.

Healdsburg witnessed 15 new listings arrive to the market last month – 35 percent less than a year ago. Buyers absorbed 19 homes in new deals while sellers closed out another 19 transactions leaving this submarket with 81 dwellings for presentation to buyers in June – 27 percent above year ago levels - culminating in an MSI reading of 4.3 – essentially affirming this region is more in balance than at any other time over the last 11 years and should this trend continue along this line that sellers will have to become more responsive to buyers. 

Petaluma’s Westside attracted 19 new sellers in May leaving available inventory at 51 homes for buyers to select from by months end. Home seekers grabbed 20 new deals in the period while sellers closed out 17 purchases allowing MSI to come roaring back to 3.0 for the month – leaving us wondering if this market may test the balance levels much like Healdsburg is now.

Sebastopol wrapped up the period with 46 available homes for buyers to consider, which included the 24 new offerings from property owners in May – another historic low for the period. Home shoppers placed 29 more abodes into contract while sellers completed another 29 sales, allowing MSI to retreat once again to a tight reading of 1.7.

Windsor has been overwhelmed with buyer demands. Property owners delivered 21 new listings in May while buyers captured another 26 deals during the period. Sellers still managed to close out 18 transactions leaving 21 homes available for home seekers to chase in June while establishing an MSI of 1.2 – still a sellers’ market.

Witnessing submarkets in the same county encounter a different cadence in activity, you have to wonder if we are witnessing the effects of the Federal Reserve rate hikes finally beginning to slow down commerce? Will these readings become trends? Will rate rollbacks, or at least the hint of them, allow these markets to actually rebound soundly back under the control of property owners? Will a new trend emerge favoring balance, if not a buyers market, take hold?