As sales volumes in national, regional and local real estate markets stagnate at their lowest levels in 30 years, there are signs that some North Bay residents may finally be starting to return to homebuying, thanks in part to lower interest rates. Can be seen.
The real estate market is widely influenced by interest rates, the supply of available housing, and buyer sentiment and confidence. When these work together, the market grows at an incredible pace, leading to long-term growth cycles. If not, our markets are exhibiting the stagnant nature that has prevailed over the past 24 months. Recent sales data suggests a change could be coming as we move from winter to spring.
According to BAREIS MLS, Sonoma County buyers successfully closed on contracts to purchase 374 single-family homes in September, 14% faster than last year at this time. Property owners delivered 295 new properties during the month. This was a 15% decrease from 2023 and also the lowest on record for the period. The buyers managed to complete the purchase of 327 homes. This is a 13% increase over the 289 units that transferred ownership at this time last year.
In October, buyers will be looking at the remaining 897 available homes in Sonoma County. This is a significant increase of 23% above the lowest level in more than 30 years experienced at this time last year.
As this year continues to take shape, buyers will be making decisions about new products as they debut and whether to buy now or wait. This is reflected in the absorption rate, a common market indicator.
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 of 20% or more indicates a reduction in the supply of available housing, thus increasing the likelihood that owners will sell their properties in the short term. Conversely, an absorption rate below 15% indicates a buyer’s market and means homes are selling slowly.
In Sonoma County, activity increased to 37% in absorption in September, highlighting that buyers are still working harder than historically to find the home they want at the rate they want. Ta. That should also mean it’s more likely to make purchases it had planned for this month, as loan rates are coming off their lowest levels since the last Federal Reserve rate cut. Depending on the loan product chosen, interest rates once again ranged from 6% to 6.75%.
Marin County property owners added 175 new single-family properties in September, also the lowest on record for the month and down 10% from a year ago. These dire inventory level shortfalls are likely to continue to create a more competitive environment for both new and existing buyers looking to make Marin their home this year. Buyers absorbed 198 homes in completed contracts and sellers completed 149 sales during the period (just two more than last year), meaning there were more homes available for buyers to view across the region in October. 391 houses remained.
Marine’s absorption rate for the month lost momentum, ending the period at 38%, which is roughly in line with neighboring markets.
In the East, it’s a slightly different story, with Napa County’s market remaining balanced for the fourth straight month. In September, 103 new properties were released onto the market, just one less than last year, leaving 397 homes available for buyers to view in October. Buyers placed 75 new deals in escrow, nine fewer than last year. Meanwhile, 73 transactions were completed in the same month, 12% more than in the same period last year.
This combination of new releases and buyer activity has kept Napa’s absorption rate steady at 19%, indicating that this market is stabilizing. This means that both buyers and sellers need to engage in thoughtful negotiations now that the playing field has adjusted.
Jeff Schween is a “Top 1% Realtor on Compass.” You can contact him through his website: SantaRosaFineHomes.com.
