You Cannot Buy a New Home if There is Nothing Available
As the shortest day of our year looms so does the trough of our real estate market, where sellers are few and buyers are left clamoring for more.
The Santa Rosa metro region is working to accommodate the demands of the greater Bay Area along with its’ own, and according to BAREIS MLS - with November in the rearview mirror - the data points to a marketplace still absorbing homes at higher than typical seasonal level with only 153 single-family homes remaining for sale in the city and its environs – 46 percent less than this same time a year ago and a new all-time low. Exacerbated buyer activity has claimed another 171 single-family homes during the past month – a rate 14 percent higher than a year earlier – which is an astounding accomplishment as we have continued to see less available new inventory arrive month over month during this past year.
The entire municipality introduced just 99 new listings to the market over the last month – 31 percent fewer than in 2020 as well as being the least ever for this municipality - while the most recent period also found Seller’s handing over keys on 205 completed sales – 21 percent ahead of last year and held back due to the lack of inventory for buyers to select from. With the lack of a credible supply, the statistics will be artificially hampered due to a significant portion of unsatiated demand going unmet each month as more homes continue to be absorbed while fewer sellers enter the “open” market – this will eventually point to a false reading of sales shrinking as when sales fall due to lack of supply is a totally different story than when they fall when inventories are bountiful.
This compression is affirmed by Santa Rosa recording its’ Months’ Supply of Inventory (MSI) at 0.7 – the tightest market this metro has ever historically recorded. This can be attributed to the fundamental shift in population migration from the greater Bay Area along with the cost of money in our current economy coupled with a lack of property owners interested in leaving the area.
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.
Within the city, Northeast Santa Rosa – the North Bay’s most active submarket - saw the introduction of just 31 single-family homes in November - 50 percent fewer than this same period a year ago. The supply of homes was met with enhanced demands during the period as there were only 78 dwellings for home seekers to consider by months end – 47 percent fewer than the depths we were experiencing at this time last year. Buyers still managed to absorb 57 homes into contracts – six percent ahead of the prior November - while sellers received closing checks on another 68 properties - culminating in an MSI of 1.1.
An even tighter market, Southeast Santa Rosa saw the supply of listed properties rest at 23 by the end of last month. This submarket debuted just 14 new homes in the period while buyers garnered accepted offers on 22 additional dwellings. This coveted corner of the city experienced 39 formal transfers in the November thereby establishing an MSI of 0.6.
Oakmont – now with its vitality restored – has rolled off several steady months of heightened buyer activity as this region was left with only 16 homes available for sale as November concluded – by far the fewest at any time over the prior year. Owners launched just 13 new offerings in the period while buyers inked out 33 new deals - 200 percent ahead of last year. Sellers concluded another 33 transactions during the month – 94 percent more than the prior year - leaving this niche market with an MSI of 0.5.
Still awash with more buyers though fewer sellers each month, Northwest Santa Rosa saw buyers swoop in to gain control of 35 more deals, leaving just 15 available single-family homes for sale at months end. Sellers committed only 22 additional offerings to the markets while another 39 homes completed the closing process. This steady, intense activity has been holding MSI under a one-month supply for well over year and, as of this month, it now rests at 0.4 – less than a two-week supply of homes.
Southwest sellers managed to deliver 19 new offerings to the market this past month only to see consumers place 24 more dwellings into contract. Newly minted homeowners captured keys on 26 closings, leaving 21 homes available for buyers to peruse in December while establishing an MSI of 0.8.
As we close out a record year, all eyes are looking ahead to see what the new year will bring.
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