For us practitioners in the market, we all sense the demands happening on “main street” throughout the communities we serve. As most are struggling with the requests from buyers yet not finding solutions from sellers within our residential marketplace to suffice.
According to BAREIS MLS, with April in the rearview mirror, the data points indicate that Sonoma County buyers successfully contracted to purchase 319 single-family homes – 28 percent fewer than the prior year. Property owners delivered 304 new offerings during the month – off 45 percent from a year earlier along with being another new historical low for this period – while buyers managed to complete purchases on 265 dwellings – 44 percent less than a year ago.
With May now upon us, buyers will be surveying the 447 available homes remaining in Sonoma County – 45 percent fewer than in 2022 - along with the debut of new ones, and making determinations for themselves as to purchasing now, or not, and this will show up in a common market measure - the absorption rate. April left us with this metric reading at 59 percent in Sonoma County – essentially on par with last year at this time – indicating buyers are putting last year’s perfect storm of challenges behind them now and determined that the 10 percent retrenching in prices locally, coupled with long-term interest rates anticipated to trend lower, are the sign to jump back into the process of acquiring their new home.
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, 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 property owners introduced merely 128 new single-family offerings last month – 49 percent less than a year earlier – with buyers absorbing 159 homes in consummated contracts. Sellers brought finality to another 152 transactions during the period – 37 percent fewer than in 2022 - leaving the entire region with just 200 dwellings available for buyers to peruse this month – 47 percent lower than last year at this time along with being another new all-time low inventory mark for the period. Marin’s absorption rate stabilized at 76 percent in April - indicating that this market may be poised for recapturing even more of its value lost over the course of last year.
One more ripple out from the Bay Area, Napa County’s markets are trailing both those mentioned above. April witnessed the release of only 85 new offerings to the marketplace – 43 percent less than twelve months earlier – leaving inventory levels in the shallows once more with merely 213 homes for home seekers to peruse in May – off 26 percent from the depths experienced at this same time last year. Buyers placed 75 new deals into escrow – 37 percent less than last year – while closed transactions tipped the scales at 61 during the month allowing the absorption rate to come back down to 29 percent – indicating that this market is steadying in favor of sellers though not overwhelmingly so as in both Sonoma & Marin County.
The cadence being experienced in our markets usually leads to a move upward in prices to attract sellers into the mindset of offering their homes for sale and, in some cases, unless a seller has a place to go or an extended period to make their move happen even that value ascension does not accomplish this. We have all heard the next phrase so often over the last few years that it’s a common point of anguish and with that said you will being hearing more from agents sharing this, “we are having supply chain issues in our markets”, so be patient while we aggressively work to deliver the shadow market housing options for you.
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