Let’s not be cavalier about where we live or the decisions with how we live as putting those aside or into a paused status can only sublimate the soul. Essential housing should not be viewed as a “timed” decision. It is needed when it is needed and should be thought of as a place of security, shelter and - for those in the coastal regions of our country - an avenue for securing the dream of a reasonable retirement. Making a bet on yourself and your future should be everyone’s priority, though less than 65 percent of our population owns a home. Homeownership rates have varied over decades, though mildly from 58 to 68 percent, and those that are negating the prospects of what owning your own home can do for you financially over a long period of time may be considered reckless or careless. Owning a home takes discipline and restraint in having to say no to other luxuries in life so that you can say yes to your own brighter future.
As in life, there is always a sequencing to be adhered to and those that function out of the proper sequence tend to have their heads handed to them at the most inopportune times. Having finally shrugged off the continuous compressions that have hampered our markets flow of commerce from the prior seven years, Sonoma County sellers returned in April after a noticeable absence from earlier in the year – though still at a decelerating rate from just the year prior. The region typically sees definitive growth in inventory as each new year unfolds with peaks typically showing in spring and summer months while valleys appear in fall and winter. According to BAREIS MLS, April data points indicate that Sonoma County buyers successfully contracted to purchase 434 single-family homes – more than any month since the Tubbs Fire occurred in October of 2017. Property owners provided 407 new listings to the market during the period, coming off a year earlier where a whopping 536 new listings came available as sellers were pulled into participation from the burning demands of fire victims. Transactions were completed on 324 dwellings over the last 30 days – eight percent less than in 2018 – leaving 872 dwellings to carry over into May and representing a healthy 32 percent climb in inventory from this same period a year ago. The cumulative effect is still indicative of a market strengthening from last Summer’s doldrums with an elevated absorption rate of 37 percent – supporting the theory that the sluggishness witnessed this last year has been abated by lowered interest rates, a pull-back in prices and renewed requirements from 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 rapidly, thereby increasing the odds that an owner will sell a property in a shorter period of time. Conversely, an absorption rate below 15 percent is indicative of a buyer’s market, meaning homes are selling more slowly.
With more newly pended deals and less new inventory coming available, Marin County’s marketplace is indicating similar trends as their neighbor to the North. April showcased 205 new offerings – 23 percent fewer than last year – with buyers quickly latching onto 227 newly consummated deals – 15 percent more than in 2018. Sellers closed out 197 transactions – three percent fewer than last April – leaving the entire region with 437 homes as offerings for buyers to select from in May – encouraging home seekers, with a rising absorption rate of 45 percent, to gain control of their new home ahead of further price increases. In a similar trend - though at a less intensive rate - Napa County’s markets which nearly touched a balanced reading over the preceding quarter have shifted back in favor of sellers. April brought showers and 147 new listings to market with buyers promptly corralling 121 into new deals during the month. Napa sellers managed to complete the sale of another 93 single family homes, leaving 352 for the markets to ponder in May and causing the absorption rate to bounce upwards to 26 percent – not necessarily indicating a rally mode but certainly pointing towards pricing pressure if not at least support.
Your personal race to your future already started, have you gotten underway? If not, do not lament the past. Become your own personal advocate and when you reach for success, well, we are here to make that happen.