Jeff Schween for The Press Democrat – New Year, New Dynamics?
January 1, 2017
New Year, New Dynamics?
New Year’s is celebrated in many forms and on numerous dates throughout the calendar year depending on the country you reside and beliefs you hold true both culturally and religiously. In 2000 BC the concept of a New Year’s celebration was first instituted in Mesopotamia. Now – more than four thousand years later – we have seen empires turnover while numerous calendars systems have come in and out of use or favor as well as variations within each. For the most part the date signifies both a remembrance of the past twelve months along with a new hope for the next. As those engaged in real estate activities this last year will tell you many buyers were left without the satisfied resolution of acquiring a new home. Hope springs eternal though, and the savvy sellers in the market will be ready to fill these needs – though likely at higher prices than the year before.
According to BAREIS MLS, Sonoma County had exactly 604 single-family homes for sale as November was laid to rest, 207 of which were new to the market – dramatically even lesser inventory than last year as the replenishment is nearly 25 percent off from this same time last year. Sonoma County saw 320 properties receive accepted offers during the month while 375 homes formally traded hands, leaving the county with a months’ supply of inventory (MSI) of 1.6.
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 generally 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 87 homes reported for sale as November wrapped up. This region experienced the addition of only 24 new properties during the month. Sonoma buyers moved forward on contracting with sellers on 28 new agreements while another 28 new homeowners were handed their set of keys. Demand remains high in the Valley of the Moon reporting an MSI of 3.1.
As November’s data filled in the charts, Healdsburg found a steady build-up of supply from last year with 75 homes still being offered for sale by months end. Properties just listed on the market accounted for only six of these while buyers weighed in and picked up only seven new deals. This submarket formally granted new ownership on 13 homes leaving this submarket with an MSI of 5.8 – technically the only market in Sonoma County in balance – putting sellers on notice that the frost may already be nipping at this market.
As the month closed in Petaluma, residents of the city’s Westside had 37 available homes to select from – nine of which were just introduced to the market during the month – 31 percent fewer than last year. Buyers managed to place contracts on 21 new dwellings – a function of the boosted supply that hit this autumn – while sellers concluded sales on 26 properties thereby tightening the MSI to 1.4 – showing that last month’s false “balance” reading was just an anomaly.
Still red hot, the Eastside of Petaluma looked bleaker and by months end there were just 17 single-family homes in play which included the 12 new properties that made their way to market in November. Eastside sellers inked 21 new contracts with buyers and this submarket witnessed 23 homes complete the transfer of ownership allowing the MSI to crack downwards to 0.7.
Traveling up the Highway 101 corridor, the coalesced markets of Rohnert Park and Cotati ended November ablaze with demand as a mere 20 single-family homes remained for sale – even as 18 new properties were launched during the month. Buyers managed to absorb 34 properties in new contracts while sales were completed on an additional 26 units, leaving this submarket with an MSI of 0.8.
Sebastopol checked in with an availability of 35 single family homes – 20 percent fewer than last year – of which 12 were listings new to the market during the same month. Sellers in Sebastopol ratified 16 new purchase agreements with buyers while 18 transactions concluded adding pressure to an already challenged market with an MSI of 1.9.
Will the Northbay markets continue their ascension and make their way solidly past prior peaks? If so, for how long and by how much? What will happen as the cost of mortgages increase? Do you have a written plan for this next year? Your success or failure could very well hinge on this last point so get into see a savvy Realtor to help you arrange your personal plan for 2017…Happy New Year!
Categorized in: Wine Country