Are you numb yet from the new routine we find ourselves in? Does your current work or living situation have you struggling with your financial or mental health? Not to put it mildly, but…that’s life. One of my favorite crooners, Frank Sinatra, penned a hit song by the same title and his generation certainly new a thing or two about depressions, pandemics and wars - both cold and real. Somewhere along the way we got soft from the extended good times and the reflection that it allowed for us to ponder and question our beliefs and ourselves – likely too much. We took our eye off the prize of what our prior generations fought for and struggled to deliver so we could all have it better than them.
Well, now its our turn to take the country under our wing and shepherd it to better times for those that follow. We are witnessing a fundamental shift in a multitude of directions that has many wondering, what is next, while others are working to make the next thing happen. There have been many seasons over the course of mankind that we would all like to forget – though we cannot. Sometimes we must struggle to learn more about ourselves and center on a new vision to create a better future. There is a movement afoot and it is favoring places just like the one we call home.
Now that the final data points have been tabulated for the Summer of 2020, we see new and unparalleled levels of activity. According to BAREIS MLS, September’s data points indicate that Sonoma County buyers successfully contracted to purchase 513 single-family homes – 19 percent higher than just a year earlier. Property owners delivered 350 new listings to the market during the period – 29 percent fewer than the prior September – while the County saw a stunning, and trend affirming, 529 sales reach fruition by months end – 25 percent greater than a year ago. The compression within our markets is easily understood by realizing that the spike in buyer demands coupled with reluctant seller’s overtime creates a chasm that inevitably forces prices higher to tempt sellers to market. This immense activity is causing available inventory to zoom off the shelves, leaving just 630 single-family homes to carry over into October – a stunning 44 percent fewer available listing than in 2019 - and clearly establishing one of the Bay Area’s highest absorption rates of 84 percent.
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 seems to be in lock step with its neighbor to the North. September showcased 207 new single-family offerings with buyers quickly latching onto 274 newly consummated deals – 26 percent greater than in 2019. Sellers closed out 266 transactions during the period - compared with 174 last year at this same time - leaving the entire region with 330 homes available for sale – 29 percent fewer than last September. Marin’s pace is robust though slightly less than Sonoma County as this month’s data indicates an absorption rate of 81 percent – providing further evidence of the deurbanization movement away from the core Bay Area metropolises – even while our North Bay region experiences another wildfire saga.
Napa County’s markets are benefitting from the trends expressed above though sellers blessed the market with 136 new homes this last month – five percent more than in 2019. That said, buyers aggressively swarmed into contract on 146 new deals while sellers closed out a remarkable 151 sales in September – both 23 percent above last year - leaving this region with just 274 homes available to the marketplace as we open the doors to October. This stint of activity showcased a 55 percent absorption rate and further denotes an expectation of rising values ahead.
As caught up as our state may be in politics, pandemics and wildfires, we continue to see very elevated demands from the surrounding Bay Area counties as people look to relocate to more open spaces in their most preferred locations where your dollar stretches further and delivers greater square footage, bigger private yards, large public parks and all in proximity to the coast, the Bay and the mountains yet miles away from the high density of the urban centers. As old “Blue Eyes” said…
”I've been a puppet, a pauper, a pirate, a poet, a pawn and a king
I've been up and down and over and out and I know one thing
Each time I find myself, layin' flat on my face
I just pick myself up and get back in the race