Will Sellers Return in 2024

Will Sellers Return in 2024

We are seeing buyers return from their holiday slumber and encouraged by the prospects of more favorable interest rates. Now, after years of a steady decline of property sellers, will 2024 be the year
we see an uptick of available homes to select from?

According to BAREIS MLS, Sonoma County had exactly 404 single-family homes left for sale at the close of January – 15 percent greater than this same period a year earlier though six percent less than just last month, which we have rarely seen happen over the last 50 years. Sellers delivered 164 new listings to the market during the period – 35 percent less than in 2023 and a new all-time low for the month -
while buyers garnered control of another 222 new deals – 20 percent more than a year ago. In support of these metrics, completed sales tipped the scales at 184 for the period – five percent higher than the
175 homes sold last January.

The continued pace of the markets can be measured by the months’ supply of inventory (MSI) and, with the Federal Reserve now in a more neutral position, MSI has continued to stabilize over the last three
months with January showcasing a tightened reading of 2.2. 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 61 homes reported for sale as January concluded – 49 percent higher than
last year. This region experienced the addition of 18 new listings during the month – another historical low - while buyers garnered accepted contracts on 18 more properties. Sellers in the valley awarded
keys to 29 new homeowners causing MSI to contract to 2.1 – whipsawing back from last month’s neutral reading.

Healdsburg witnessed just seven new listings arrive to the market last month – 68 percent less than a year ago. Buyers absorbed nine homes in new deals while sellers closed out another 11 transactions
leaving this submarket with 35 dwellings for presentation to buyers in February – 18 percent less than last month - culminating into an MSI reading of 3.2.

Petaluma’s Westside attracted 12 new sellers in January leaving available inventory at 26 homes for buyers to select from by months end. Home seekers grabbed 17 new deals in the period while sellers
closed out only seven purchases sling shotting MSI upwards to 3.7, though with expectations of it falling rapidly this next month.

Sebastopol wrapped up the period once again with 27 available homes for buyers to consider, which included the 10 new offerings from property owners in January – another historic low for the period.
Home shoppers placed nine more abodes into contract while sellers completed another eight sales, allowing MSI to surge upwards to 3.4 – keep an eye out to see if this steadies near this level or falls once
again.

Windsor property owners delivered 13 new listings in January while buyers captured another 13 deals during the period. Sellers closed out 10 more transactions leaving only 11 single-family homes available
for buyers to chase in February while establishing an MSI of 1.1 for the period – very much a sellers’ market.

At this point, we are seeing traditional buyer behavior with early predictions that we will see more sellers in 2024 nationally, though, what about regionally? The forces upon us nationally do not always
hold true in our region and we will be watching this metric ever closely to understand whether values will remain stable or if the lack of regional participation from property owners will cause an uptick in prices for Spring.