In The News

Jeff Schween for The Press Democrat – Spotlight On The Revenant Fury of The Markets

Spotlight On The Revenant Fury of The Markets

Hollywood’s elite and newcomers celebrated the 88th Academy Awards night with style and controversy. As those in the know made predictions, those in the audience awaited confirmation of work well performed. The anticipation of what would surprise as well as what may disappoint hung in the air. Similarly, those participating in their quest for being awarded their new home must sometimes sweat out the moments of not knowing a particular outcome as the markets remain over weighted with buyers hoping to get the nod this Spring that they too have achieved their prize – a new place to call home.

To Triumph you must put the time into your craft. Preparation, belief, commitment and, of course, acumen are traits of success in the pursuit of real estate. Understanding inventory trends in Sonoma County submarkets may fill a void left by the ever present macro analysis of the nation, state, and region.

According to BAREIS MLS, there were exactly 470 single-family homes for sale as January came to a rest, 226 of which were new to the market. Sonoma County saw 278 units receive accepted offers during the month while 254 homes formally traded hands, leaving the county with a months’ supply of inventory (MSI) of 1.9 – good macro information.

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 only 50 homes reported for sale as January came to a close – 17 percent fewer than the same period a year ago. This region saw the addition of only 21 new properties during the month as buyers moved forward on contracting with sellers on 28 new purchases while 24 homes formally traded hands. With the typical seasonal dip in completed transactions, the MSI slid back to 2.1 in this corner of the county – spotlighting hardy demands for even this time of year.

As January’s data filled in the charts, Healdsburg stood steady with 36 homes being offered for sale. Properties just listed on the market accounted for five of these while buyers weighed in and picked up 12 new deals – 100 percent more than the six properties the year before. This submarket formally granted new ownership on 14 homes thereby allowing the MSI to moderate to 2.6 – leaving buyers furious with the prospects of the road ahead.

As the first month of the year closed in Petaluma, residents of the city’s west side were limited to only 21 available homes – nine of which were just introduced to the market during this same period. Buyers managed to place contracts on nine dwellings while sellers were able to conclude sales on 10 more properties causing a jump in the MSI to 2.1 – testing buyers and their will to survive as they must rise to the challenge of their rivals.

On the east side of Petaluma, inventory was absorbed even more rapidly and by months end there were merely 14 single-family homes in play which included 12 new properties that made their way to market in January. Eastside sellers inked 20 new contracts with buyers, and this submarket had 21 homes complete the transfer of ownership thereby tightening the MSI to 0.7 – proving the big short in supply rests in this region of Sonoma County.

Traveling up the Highway 101 corridor, the combined markets of Rohnert Park and Cotati ended January with only 23 single family homes for sale, which included 19 properties that were newly introduced to the market during the month. Buyers came to terms with sellers on 13 homes while sales were completed on 23 more, leaving this submarket with an MSI of 1.0 – as sellers held back on nominating their homes for sale.

Sebastopol checked in with an availability of now just 17 single family homes, of which seven were listings new to the market in the same month. Sellers in Sebastopol ratified 18 new contracts with buyers as 14 transactions concluded holding the MSI down at 1.2 – further indicating the creed in this neck of the woods is that seller’s control the market.

Windsor wrapped up January with 28 homes available to anxious buyers which included the debut of 21 new properties to market during the same period. Buyers managed to put together 27 new purchase agreements while sales came to fruition on another 13 properties allowing the MSI to rise slightly to 2.2 – emphasizing there may be room for the absorption of a greater number of properties this year.

With Hollywood’s version of awards now in the rearview mirror, look ahead to a year of achieving your pinnacle of success – the Oscar for Best New Homeowner. I encourage you to step out of what is comfortable as the award for “Best Offer in a Second Position” is not usually one you want to win or tell your friends and family about.

Jeff Schween

By Jeff Schween, of Pacific Union International’s Santa Rosa office.