The Marketplace is Teeming with Buyers

The Marketplace is Teeming with Buyers

The winter market window is now closed and that means buyers have more of themselves to compete with. We are seeing a palpable increase in those demanding to be here more so than
those looking to leave here.

According to BAREIS MLS, now two months into the new year, we find our markets are off to a brisk start. The data points indicate that Sonoma County buyers successfully contracted to
purchase 254 single-family homes – four percent ahead of last February. Property owners delivered just 194 new offerings during the month – off 32 percent from 2023 along with being
another new historical low for the period – while buyers managed to complete purchases on 190 dwellings – four percent fewer than the 197 units that changed hands last year at this time.

With March now upon us, buyers will be surveying the 420 available homes remaining in Sonoma County – an encouraging 10 percent more than in 2023. As the year continues to take
shape, buyers will be making determinations on these offerings, along with the debut of new ones, as to purchasing now, or not, and this will show up in a common market measure - the
absorption rate. February’s market participants drove us to a 45 percent reading as Sonoma County remains buoyant with activity lifted by lower mortgage rates and the continuous exit of
population from the core Bay Area region along with additional relocations to the wine country from out of state buyers.

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, 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 property owners introduced 87 new single-family offerings in February – 43 percent less than the 152 units that debuted during the same period last year, which was an all-time low
record even then. This woefully lacking inventory introduction could exacerbate a staunchly more competitive environment for both new and existing buyers in pursuit of making Marin their
home in 2024. Buyers absorbed 95 homes in consummated contracts while sellers brought finality to another 83 transactions during the period – 12 percent behind last year - leaving the
entire region with 160 dwellings available for buyers to peruse as we break into March. Marin’s absorption rate steadied at 52 percent - indicating that this market may experience price
escalations as more suitors become available for each prospective offering, and with interest rates trending more favorably for the borrowing population, this could certainly make acquiring
your new home in 2024 an even more competitive task while pushing would be home seekers northwards into Sonoma County to achieve their property ownership goals.
Napa County’s markets still trail both those mentioned above when it comes to activity. February witnessed the release of 69 new offerings to the marketplace – 27 percent less than twelve
months earlier along with being another new monthly low. The lack of willing sellers is leaving inventory levels in the shallows once again with 185 dwellings for home seekers to peruse this

March. Buyers placed 56 new deals into escrow – 14 percent less than in 2023 – while closed transactions tipped the scales at 52 during the month – 21 percent greater than last year. The
combination of new releases coupled with buyer activity has the absorption rate a bit higher this month at 28 percent – indicating that the previous months that made buyers feel like they would
be yielding more control over market terms has once again given way towards trending under the control of sellers.

We expect both new sellers and buyers to continue to show up each day in these Northbay markets, at least until we hit our typical summer pause period and definitely as we creep nearer the 2024 Presidential election.