As we near the second anniversary of the firestorms that besieged the North Bay, we anticipate there will be a significant shift in local consumers demands and the actions they will take. Some – about 2200 homeowners - who have not dipped their toes into the arena to initiate a rebuilding effort will be faced with decisions thrust upon them by insurance companies looking to close out their claims. Do I rebuild? Do I buy a new home? Do I move away and sell my lot? The choices made - due to the sheer volume – may dictate some unusual market dynamics in the near term.
In the midst of shrugging off the continuous compressions that have hampered it over the prior seven years, Sonoma County sellers continued their return in June – 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, June data points indicate that Sonoma County buyers successfully contracted to purchase 456 single-family homes – well above the 399 that went into contract just a year earlier. Property owners provided 412 new listings to the market during the period, coming off a year earlier where a whopping 613 new listings came available as sellers were pulled into participation from the burning demands of fire victims. Transactions were completed on 405 dwellings over the last 30 days – on par with a year ago – leaving 1130 dwellings to carry over into July and representing a healthy 20 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 a resurgent absorption rate of 36 percent – further affirming 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 a greater amount of newly pended deals and less new inventory coming available, Marin County’s marketplace is indicating a similar yet more seller favored trend than their neighbor to the North. June showcased 161 new offerings – 24 percent fewer than last year – with buyers quickly latching onto 232 newly consummated deals – 10 percent more than in 2018. Sellers closed out 211 transactions during the period leaving the entire region with 487 homes as offerings for buyers to select from in July - encouraging home seekers, with an elevated absorption rate of 43 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 crawled their way back to favor sellers once again. June brought 123 new listings to market – 25 percent less than the prior year - with buyers promptly absorbing 136 into new deals during the month. Napa sellers managed to complete the sale of another 118 single family homes, leaving 438 more for the markets to ponder in July and causing the absorption rate to steady at 27 percent – not necessarily indicating a rally mode but certainly pointing towards a market supportive of current pricing.
If you are struggling to figure out your best situation, we got you covered and are prepared to help you assess how to make the most out of where you are - after all, now is the only time you control.