Wait For It…
As we ring in the New Year today, we reflect on where the market has been, and more curiously, how we expect it to perform in 2024. As noted by the National Association of Realtors (NAR), this year should
be concluding with approximately 3.9 million home sales across the country, which is the lowest volume of transactions since 1993 – due to the lack of supply of inventory and the elevated interest rate
environment. Coincidentally, we saw prices rise to reclaim the nine percent that was lost in 2022 then stagnate into essentially the holding pattern we are in today.
According to BAREIS MLS, Sonoma County had exactly 629 single-family homes left for sale at the close of November – 11 percent greater than this same period twelve months earlier. Sellers delivered 165
new listings to the market during the period – 30 percent less than in 2022 - while buyers garnered control of another 247 new deals – eight percent less than a year earlier. In support of these metrics,
completed sales tipped the scales at 228 for the period – 23 percent off the 296 homes sold in the same period last 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
continued to stabilize and in November the level stood at 2.8 – still indicative of a seller’s market as we make our way through the holiday season. 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 96 homes reported for sale as November concluded – 17 percent higher than last year. This region experienced the addition of just 12 new listings during the month while buyers garnered accepted contracts on 22 more properties. Sellers in the valley awarded keys to 25 new
homeowners allowing MSI to expand to 3.8 – nearly tipping its toes into a balanced reading. Healdsburg witnessed only six new listings arrive to the market last month – 40 percent less than a year
ago. Buyers absorbed 11 homes in new deals while sellers closed out another nine transactions leaving this submarket with 62 homes for presentation to buyers in December – which is 68 percent higher than where it was twelve months prior while revealing an MSI swinging back and forth over the course of the year culminating into a reading of 6.9 for the period – technically a market where buyers should be able to negotiate more while having less competition.
Petaluma’s Westside attracted nine new sellers in November leaving available inventory at 36 homes for buyers to select from by months end. Home seekers grabbed 18 new deals in the period while sellers
closed out nine purchases holding MSI at 2.4.
Sebastopol wrapped up the period with 40 available homes for buyers to consider, which included the seven new offerings from property owners in November. Home shoppers placed 18 more dwellings into contract while sellers completed 16 sales, causing MSI to stabilize at 2.5 for the month.
Windsor property owners delivered just seven new listings in November while buyers captured 14 deals during the period. Sellers closed out 14 more transactions leaving only 13 single-family homes available for buyers to chase in December while establishing an MSI of 0.9 for the period – indicative of a market firmly controlled by sellers.
As we look upon the New Year, the overwhelming slant is that we should see a tick up in the volume of sales spurred both by supply and interest rates moving into a more favorable position for a larger
percentage of borrowers. Couple this with more dovish Federal Reserve position and the energy of the Presidential election and we could see more competition show up for each property owner that
determines they are going to be a seller. Make it the year you take control of the life you want and where you want to live!
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