Each month of this last year has documented that fewer sellers exist in our marketplace than before. Which supports our hypothesis from last year that many sellers advanced their planned sales more quickly right after the 2017 wildfires to both take advantage of the buyers demands in our marketplace and to recalibrate their own time tables on decisions they were planning to make anyway in the ensuing years.
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, October data points indicate that Sonoma County buyers successfully contracted to purchase 390 single-family homes – seven percent greater than a year earlier. Property owners provided 272 new listings to the market during the period – 35 percent less than the prior year when 419 new listings came available - while transactions were completed on 380 dwellings over the last 30 days leaving 1023 available properties to carry over into November. The cumulative effect is still indicative of a market strengthening from last Fall with a steady and resurgent absorption rate of 37 percent – further affirming the sluggishness witnessed in 2018 has been abated by lowered interest rates 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. Conversely, an absorption rate below 15 percent is indicative of a buyer’s market, meaning homes are selling more slowly.
Marin County’s marketplace is confirming a similar path though with even stronger metrics. October showcased merely 103 new offerings – an eye-popping 48 percent fewer than last year – with buyers quickly latching onto 198 newly consummated deals. Sellers closed out 202 transactions during the period leaving the entire county with 390 homes as offerings for buyers to select from in November and further encouraging home seekers – now with an even higher absorption rate of 52 percent - to gain control of their new home ahead of further price increases.
Napa County’s markets - which have technically shown signs of entering a balanced market in three of the last twelve months - has once again tipped in favor of sellers this month, though holding near the threshold of balance for the entire last year. October brought only 83 new listings to market – 39 percent less than the prior year - with buyers promptly absorbing 102 properties into new deals during the month. Napa sellers managed to complete the sale of 118 single family homes, leaving 410 left for the markets to ponder in November while causing the absorption rate to improve to 29 percent – a reading that is supportive of firmer pricing.
Is our region out of an appreciable number of new sellers? Where will our inventory come from? Time will tell this story. As the members of our community have become more resilient they tend to want to keep their roots where they are and may have realized – as trees and plants no so well – it is not always so easy to just up and transplant yourself to somewhere else and thrive like you do where you are right now. So, if you are looking to improve your situation, reach out and let us show you how.
