California resale inventory shrinking as median price rises for the 8th month in a row
This story from Inman News was published a day after my previous post about the national real estate market--and reinforces the point I was making about the differences in our market and its phase in the recovery process.California resale inventory shrinking | Real Estate and Technology News for Agents, Brokers and Investors | Inman News Inventories of existing single-family homes in California are dwindling, reaching just four months of supply as the sales pace picked up from September to October, the California Association of Realtors reported. Home sales historically trail off during the fall and winter months, CAR said, but affordable home prices, low mortgage rates, and the extension and expansion of the federal homebuyer tax credit are expected to drive home sales through the end of the year and into early 2010. Existing single-family detached homes sold at a seasonally adjusted annual rate of 562,400 in October, up 5.9 percent from September and 1 percent from a year ago, the group said. The months supply of inventory fell from 4.2 months in September and 6.1 months a year ago. A 6-month supply of inventory is about what analysts consider an even balance between supply and demand. It took a median of 34.1 days on market to sell a home in California in October 2009, compared with 45.5 days for the same period a year ago. At $297,500, median home price was essentially unchanged from September, but down 3.2 percent from a year ago. Although the $890 increase in median price from September to October amounted to 0.3 percent, it was the eighth consecutive monthly gain. CAR Chief Economist Leslie Appleton-Young cited that trend, along with continued strength in sales, as "signs that California has hit and passed the bottom of this real estate cycle." For the first-time since July 2007, she said, sales of homes priced $1 million or more rose in year-to-year comparisons, and the number of distressed sales as a share of total sales has shown considerable improvement since the beginning of the year. In Sonoma County and much of the Bay Area of Northern California, inventory supply is hovering around 2 to 3 months, reflecting the strong regional differences in the California markets. The Bay area and North Bay are limited geographic areas bounded by mountains, hills, the Bay and Pacific Ocean. In the central valley of California new home construction booms simply expanded communities into flat, seemingly limitless former farmland. ...
An Upturn in the Housing Market May Be Reversing – NYTimes.com
But what about Sonoma County and Northern California? If you read this article in the business section of today's New York Times, An Upturn in the Housing Market May Be Reversing - NYTimes.com you'd find very justifiable skepticism about the increase in real estate sales volume nationally that we've experienced this summer and fall. As some friends and I discussed at dinner in Healdsburg Monday night, no one is convinced that the economy is on firmly recovering footing, Wall Street enthusiasm aside. So are we up for a "W" recovery--meaning another downturn in housing prices? From the article, which discussed the latest Case Shiller Housing Index Report: The two housing price reports lag, by a month, the figures on the volume of home resales, which were issued Monday for October. Home resales jumped 10.1 percent to the highest level in two years, better than analysts had expected. Much of the increase was attributed to the $8,000 first-time buyer’s tax credit, which had been set to expire Nov. 30 but has been renewed through spring. Buyers who have already owned a home are now eligible for a $6,500 credit. While brisk sales volume should, in theory, push up prices, Maureen Maitland, the vice president for index services at S.& P., said the oversupply of inventory was acting as a brake. “You can look down the street and have 10 houses to choose from,” she said. About 3.57 million used homes are for sale, a number that has been declining but is still higher than the historic average. It represents seven months of inventory at the current sales rate. Ms. Maitland speculated that the housing market might follow a “W” pattern, as the price lows plumbed last spring are tested again this winter. It's all well and good to look at national statistics, but (and this is a cliche so forgive me)--looking at the national housing market to try to determine what is happening with home values in your neighborhood is like trying to know what the weather will be like by knowing what the average temperature in the US is at any given time. Just look at the paragraph above--7 months available inventory nationwide. In Sonoma County we have less than three months of inventory available county wide, and less than two months at the lower price ranges. Even at the upper price ranges we have about 10 months of inventory...
Windsor Housing Sales Trends different than rest of Sonoma County
This is the 7th of the series looking at housing sales trends in Sonoma County. Windsor, sandwiched between Santa Rosa and Healdsburg, has probably the most homogenous housing supply in the county, with many tract homes all clustered in the mid-price ranges. There are estate properties at Shiloh on the east side of 101, and many vineyard, horse and estate homes on the west side of town off Starr Road and others, and I often advise my country property buyers not to overlook Windsor because there are some beautiful wine country homes that can be easily overlooked in a search. But the preponderance are 3-4 bedroom homes priced in the mid-price ranges. Maybe that is why the recovery doesn't look quite so strong here yet in terms of prices. The median price in October 2007 was $620,000 and is now at $357,500, up from a low of $325,000 in April (not February!). Unit sales hit a near peak last month of 42 (the two year peak was 46 and the low was 11 in December 2007 when sales in the mid price ranges started their stall. Month's supply of inventory followed a steep decline from a high peak of 17.5 months two years ago to a low of 2 months over the course of September and October. I hope this series has been helpful! It has been interesting for me to look at individual towns in this way, and the stats seem to confirm my own impressions from my knowledge on the ground of the markets in each of the communities we've discussed. Each property, each location, each home is unique. If you would like some specific information about a home you are thinking of buying or selling, please let me know!...
Russian River Area Homes in Short Supply, but a Relatively Stable Market
As I reach Post 6 of this series looking at housing inventory trends around Sonoma County, I am struck by how relatively stable pricing has been in the Russian River area, from the farms of Forestville to the Redwoods of Guerneville and Monte Rio to the ocean at Jenner. Prices have always been lower "on the river" and the median has declined only 3% over the past two years, from $326,500 to $317,000. It hit a low of $190,000 in February and March of this year. Again-this probably has to do with an increase in sales in the mid and upper ranges after an almost exclusive focus on the low end of the market. Unit sales hit a two year high of 30 units in June of 2009 after a low of 8 last November, 2008. Unit sales usually are in the teens and twenties. Months supply of inventory is down to 3.6 from 5.8 two years ago. It did hover around 17.5 months last year at this time however. ...
Petaluma Housing Inventory Low and Median Price Increased Significantly
Here is Part 5 of my series looking at the supply of homes for sale (Months Supply of Inventory is the measure) in various Sonoma County communities. Petaluma consists of two MLS (Multiple Listings Service) areas-West and East--with very different characteristics. For the purposes of this post we will combine the two. It was very interesting to look at the trends here over the last two years because I think Petaluma is where the housing market crawled back over the bottom soonest. 80 units were sold in October 2008 which really put a crimp in supply for the winter months. The bottom was hit in February 2009 (noticing a pattern here?) when only 25 units sold, but sales are usually in the 20's and 30's. Median price was at $510,000 in October 2007 and is at $425,000 now, down 17%. But prices are up significantly from the low, which was $323,000. The median price does not fluctuate too widely in Petaluma compared to other Sonoma towns. Inventory peaked at an 8.5 months supply two years ago, but is a sparse 2.5 months now. ...
Sonoma Valley Available Homes for Sale Trending Strongly Downward
The Valley of the Moon represents the other Sonoma, not the county but the towns of Sonoma, Kenwood, Glen Ellen and Boyes Hot Springs. Sales volume ranged the last two years from a low of 15 units in December 2007 to a high of 45 units last May. The range of price points is very large, as in Healdsburg but overall the media price declined from $705,000 two years ago to a low of $323,000 in April 2009. It has bounced up and is currently at $390,000-down 45% over the two years, probably disproportionately aided by the slower sales of high end homes. Months supply of inventory was nearly 20 in October 2007, peaked at over 22.5 in December 2007 and is now tied for its low at 5.1 months, a seller's market. ...
Sebastopol Real Estate Supply has been (relatively) low for a long time
Sebastopol, like Healdsburg, is one of the strongest markets in Sonoma County real estate. The number of units sold per month over the last two years ranged from a low of 6 units in December 2007 to recent highs of 26 units with sales generally in the teens and twenties. A bit bigger supply then Healdsburg but not much. Over the last two years the median price did not see the wide swings that Healdsburg did (Healdsburg has more outlier properties for sale well into the $3 to $6 million range). Sebastopol median price was $824,000 in October 2007 and is $575,000 today. Overall the median price decline was 30%, but I think it has been more affected by the preponderance of sales at the lower price points and on small to no acreage. Market values have declined somewhat but many sellers were able to withdraw their more expensive homes for sale. The market for those appears to be picking up. The median price hit a low of $475,000 in February of this year, as elsewhere in the county. Interestingly, Sebastopol had only 5 months of inventory for sale in October 2007, trended above 7 for a few months and is now at 3.8 months supply. Inventory never really got too out of hand. [caption id="attachment_595" align="alignleft" width="450" caption="Sebastopol Home Resale Inventory Shrinking"][/caption]...
Healdsburg Real Estate Inventory Trends
Here is the next in my series looking at market conditions for various communities in Sonoma County. Healdsburg real estate represents a small sample size with monthly sales ranging from 2 units to 24 units and median price ranging from $352,000 to over $3,000,000 on any give month over the last two years, with several months in which the median price was just over a million. So take this with a little grain of salt. Nonetheless, inventory never really spiked for long, sales are on the upswing, median price is down 27% since October 2007. Month's supply of inventory moved downward from 14 months in October 2007 to 6 months today, a balanced market, probably reflecting the amount of high priced inventory on the market here. MSI peaked at 25 months in February 2008. [caption id="attachment_589" align="alignleft" width="450" caption="Portrait of a more balanced market for Healdsburg Real Estate"][/caption]...
Santa Rosa Real Estate Inventory Trends
I have been writing a lot lately about Month's Supply of Inventory as it relates the national and California real estate markets to the Sonoma County real estate market. Inventory here is much lower then either nationally or statewide, putting Sonoma County in a real seller's market, primarily at the lower price points but we are also seeing a lot more movement of mid-priced and upper end properties over a million dollars. That price point was dead much of this year. I thought I would do a series of quick snapshots of inventory supply in each of the major Sonoma County MLS regions so we could see the variation within the county. Some of these have small sample sizes but I think they are big enough to spot trends. If you asked me about 3 bedroom homes on quarter acre lots in Northeast Santa Rosa, we might not have a big enough sample to be meaningful, but you can try me. If you would like more detailed information about your community's sales trends, please email or phone me and I will send you more detailed reports. Santa Rosa is the largest area in the county, spanning four different quadrants: NE, SE, SW and NW. I could pull reports for each one and I suspect we would find some good variation but let's start here. The median price of single family homes (including condominiums and farms and ranches) is down 33% from October 2007 when it was $450,000. The low was reached in February of 2009 at $250,000. It is currently just over $300,000 for the first time since September 2008. Months supply of inventory is only TWO MONTHS, down from a peak of 16 in both October and December 2007. Anything under 5-7 months is considered a seller's market. [caption id="attachment_582" align="alignleft" width="450" caption="Months Supply of Housing Inventory Shrinking in Santa Rosa, CA"][/caption]...
Why it may be a good time to sell your mid-priced home in Sonoma County
Certainly there is expected to be a new wave in the spring of foreclosure properties but right now there is very little inventory of homes for sale in Sonoma County between $450,000 and $550,000. And there are great bargains to be had in country property or slightly more expensive homes. In every market, there are opportunities, you just need to be aware of the current trends and be opportunistic! Granted you are not going to sell your home for what it would have fetched 2 or 3 years ago, but neither will you pay what you would have on the other end....