When Will Sellers Deliver New Inventory?
The roll out of newly listed homes for buyers to select from continues at a snail’s pace. Blame it on the weather, interest rates, season or just sellers lack of motivation to do so and we could be heading for a bit of stagnation within the flow of commerce.
According to BAREIS MLS, Sonoma County had exactly 378 single-family homes left for sale at the close of February – 48 percent fewer than this same period twelve months ago and another new all-time low for the period. Sellers delivered 188 new listings to the market during the month – 64 percent less than in 2022 - while buyers garnered control of another 242 new deals – 29 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 188 for the period – 33 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 steadied to 2.0 in February – 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 54 homes reported for sale as February concluded – 51 percent less than this same period a year ago. This region experienced the addition of 17 new listings during the month while buyers garnered accepted contracts on 16 more properties. Sellers in the valley awarded keys to 14 new homeowners – 46 percent off from a year earlier – allowing MSI to slingshot up to 3.9 – revisiting a near balanced reading that occurred in the prior February.
Healdsburg witnessed just seven new listings arrive to the market last month – 71 percent fewer than a year earlier and another new all-time low. Buyers absorbed 14 homes in new deals while sellers closed out another seven transactions leaving this submarket with 22 homes for presentation to buyers in March – less than the historic lows experienced in both of the previous month and revealing an MSI of 3.1.
Petaluma’s Westside attracted only six new sellers in February which caused available inventory to fall to 21 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 13 more purchases leading to an MSI of 1.6.
Similarly, Sebastopol wrapped up the period with 25 available homes for buyers to consider inclusive of the nine additional offerings brought forth in the period. Home shoppers placed 17 more dwellings into contract while sellers completed 16 sales causing MSI to tighten further to 1.6.
Windsor property owners delivered 16 new listings in February while buyers captured 23 deals during the period. Sellers closed out 12 more transactions leaving 20 single-family homes available for buyers to peruse in March while highlighting an MSI of 1.7.
We will see more homes come to market as the year opens up. The news will be created by the cadence of this flow as well as to how well received they are by market buyers. This will establish the direction of prices and whether we regain value ceded during the last half of last year, tread water or give way a bit further to the downside.
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