Archive for the 'Market updates' Category

Only 2.2 Months Supply of Housing Inventory, Really?

filed under: Market updates posted on November 3rd, 2009

Two years ago at this time real estate inventory started to pile up and nearly 3800 homes were for sale in Sonoma County. The years of seemingly unending price increases were starting to slow and reverse course. In October 2007 there were 3787 homes for sale and 606 sold that month. At that rate of sales, there were 12.5 months supply of inventory.

Fast forward two years and there are only 2368 homes for sale in Sonoma County and 431 of them sold in October. So while the number of sales was down slightly versus two years ago at this time, the total number of available homes was down significantly. At the current rate of sales, there is only a 2.2 months supply of inventory. MSI measures the ratio of demand and supply. When the supply of homes for sale would be absorbed in less than five months at the current rate of sales, we have a seller’s market.

Generally a balanced market, meaning a level playing field for buyers and sellers, consists of a housing supply of 5 to 7 months. Deals are getting done and neither side feels that it has an upper hand. If you look at the graph below, it looks like we last had that between April 2008 and February 2009. That was when the first wave of foreclosures was starting to hit and sellers were reducing prices.

A buyer’s market is what we had in late 2007. Sales were slowing, inventory accumulating and prices were stalling or dropping. A buyer’s market is anything over 7 months supply, we were at 12.5 months. It peaked in December 2007.

What does this stat mean for you as a buyer or seller of real estate? It is a quick way to gauge price trends in a given market. But these numbers can be really misleading too because each town and area and more importantly today, each price point really varies. But that (and the anticipated coming wave of foreclosures) is a subject for some future posts.

posted by Pam Buda // 1 Comment »

Only half the Sonoma County homes for sale this year compared to last

filed under: Market updates, Sellers posted on November 2nd, 2009

Month’s Supply of Inventory (MSI) is down sharply from last year.

Sales of existing single family homes fell slightly last quarter as first time buyers and investors busily snatched up entry level homes price under $350,000. At the present moment, November 2, 2009, there are only 1190 homes for sale Unit sales are down also, from priced under $500,000 county wide, versus 2,458 at the end of October 2008, meaning there are only 2.8 months of inventory supply if sales continue at their current rate. Anything under a five to seven months supply is considered to be a sellers market. Inventory is in very short supply and sales seem to be increasing even moving up to the higher price points. Please call or email me if you would like to sell your home. If you have been hesitating to sell your home because of the market, conditions may be more favorable than you think.

posted by Pam Buda // Comments Off on Only half the Sonoma County homes for sale this year compared to last

All the Real Estate Market Stats you Can Eat

filed under: Market updates posted on September 22nd, 2009

I have some  great new tools available which will enable me to create and share Real Estate Market Statistics and Analysis to my (and your) heat’s content.   Here is my first post which contains a whole set of data looking at median price, units sold, days on market and month’s supply of inventory for all residential sales (single-family homes, condos and farms and ranches) in Sonoma County.  For those of you who like these things they will soon have their own page where you can revel in the data as much as you like.  I will also be drilling down further to look at country properties, specific communities and different price ranges because this is definitely not a one-size-fits-all market when it comes to real estate sales throughout Sonoma County.   Also, if you have a specific type of property or area you would like to look at more closely, please email or call and I will see what I can do.  Enjoy!

NOTE:Some pop-up blockers may object. Please let me know your experience with this mode of delivering fresh market stats!

posted by Pam Buda // 1 Comment »

Sonoma County Real Estate Sales Update

filed under: Market updates posted on September 19th, 2009

County wide sales trend in Sonoma County don’t tell the whole story about our real estate market, since the lower priced properties ($400,000 and under) are the tail wagging our real estate market dog. (!!) But we have to start somewhere so here you go.  (Click on the image for a larger, clearer view.)

Median Home Sales Price August 2008 through August 2009

Median Home Sales Price August 2008 through August 2009

Year over year the median Sonoma County home price dropped 5% to $359,000.  However, the apparent bottom for this market (whether a V, U or W is yet to be determined) was in February when the median price was $315,000.  Some of my smart buyer clients (you know who you are) are happily ensconced in homes they bought in January and February, sensing the (a?) bottom had arrived.  We (please forgive a pat on the back here) called it in March. The price increase is being driven by the shortage of entry level listings and multiple offer bidding wars driving what inventory is out there up in price.   Prices at the upper ranges ($800,000 and up, particularly over a million dollars) are very soft.  Choice properties in choice locations are selling, sometimes with multiple offers in Sebastopol, Healdsburg and Sonoma, but they are the exception rather than the rule.

13 month Real Estate Sales Trends Sonoma County

13 month Real Estate Sales Trends Sonoma County

Inventory has dropped DRAMATICALLY.  Is this due to the shadow inventory of foreclosed being held back by the banks?  Or is it a reflection of the inventory that piled up before prices began their steepest decline, and the market caught up with reality?

The number or newly opened escrows, or sales marked “Under Contract” where the sale has not yet been completed, has been steadily increasing.  (NOTE:  Not all of these will close.  In fact a large number are falling out of contract. I had heard this week as many as 40% but do not have documentation of that fact.   I can tell you that most of the escrows I open for clients DO close but that is another story.)

Many bloggers and real estate writers have written about the decline of unit sales in August, which was unexpected.  What does that mean?  I am less concerned because the trend of newly under contract sales is steadily growing.  Time will tell if that data point reflects a trend, or if it is just an anomaly.

posted by Pam Buda // 1 Comment »

Sonoma County Real Estate Market Half-Time Report

filed under: Buyers, Market updates posted on July 27th, 2009

The long days and sunny weather have taken me away from my computer–sorry it has been so long since my last post. I have a new iPhone (fun and without a doubt best new productivity tool in a long time–probably since my first Palm Pilot in 1996). I am available by phone or email or Twitter, Facebook, etc. if you have an immediate question, please feel free to contact me. And thanks to those of you who already have!

We are in the thick of a hot summer market here in Sonoma County. Buyers have been coming back into our market in increasing numbers since late last year. Now, nearly every property sold under $400,000 has multiple offers. First time buyers or conventional buyers with ten or twenty percent down should expect to have to write offers on multiple properties before they get “the one”. There is only 2-4 months supply of inventory available at the current rate of sales (at price points under a million dollars).

What about the new wave of “shadow” inventory of foreclosure properties being held back from the market by the bank? At this point, it would appear that the market of existing buyers (both first time buyers and investors) will absorb it fairly readily.

posted by Pam Buda // 2 Comments »

Where the action is in Sonoma County Real Estate

filed under: Market updates posted on April 17th, 2009

Brokermetrics, a real estate data analysis service provided by Terradatum, is currently beta-testing a new tool for analyzing real estate sales trends by price range. This is really welcome as far as I am concerned because our market is so hot at the low end (under $400,000) and so slow at higher price points that it is really difficult to make sense of market stats country wide for all price ranges. It takes a lot of slicing and dicing to confirm what most of us already know, that mid and upper price range properties are moving much more slowly than entry level homes being snatched up by first time buyers and investors. So here is a look at the new Brokermetrics graph. I know you really need your microscope to read these images, so don’t forget to click on them so you can go to a larger version than fits in my middle column here.
sonomacountymarketdynamicbypricerange.jpg

posted by Pam Buda // Comments Off on Where the action is in Sonoma County Real Estate

Median Home Price Rises in Sonoma County

filed under: Market updates posted on April 3rd, 2009

A few days ago I wrote in a post:

The sheer activity level, the vast number of first time buyers and investor clients looking for rental property, and the declining number of new listings have all been detailed here over the previous months. In December, new sales exceeded new listings for the first time in many months, and, beginning in February it seems to us that the bottom was reached and had passed some entry level buyers by.

A few minutes ago I received the following snapshot of the Sonoma County Real Estate Market closed sales figures from March 2008 through March 2009, thanks to my broker, Rick Laws of Coldwell Banker, who compiles our market statistics and shares them generously, with not only me and my colleagues, but the Press Democrat newspaper.
Median sales price starts to rise in Sonoma County, March 2009

Obviously one of the take aways from this graph, year over year, is the 27% drop in median price for the county. But the median price rose from its low in February about $10,000 with a high rate of closed sales and a good statistical base. Prices on the low end seem to have stabilized and maybe bounced upwards a few percent. This is as welcome as the signs of spring!

posted by Pam Buda // 1 Comment »

Have we hit bottom in the Sonoma County real estate market cycle?

filed under: Market updates posted on March 30th, 2009

Actually the only way you know is when it has passed by.

A few weeks ago an agent friend and I were visiting as I fed the horses one early spring evening. She was telling me of the difficulties she was having successfully securing a home for first time buyers. This a great agent with many years of experience who was working with entry level low income buyers in Sonoma County. They were looking for a home priced under $200,000 in the Santa Rosa city limits. They were pre-approved for FHA financing with the reputable lender who had referred them to my client. They are eligible for a $10,000 down payment assistance from the city of Santa Rosa which will subsidize their down payment. Their income and credit qualified them for an FHA (Federal Housing Administration) loan. Although they qualify for the federal government first time buyer $8,000 tax credit, that cash won’t reach their pockets until after the sale has closed.

This couple was competing in many multiple offer situations with all cash investor buyers or other first time buyers such as themselves. Many properties in their price range were in such poor condition that they would not meet the strict FHA property condition guidelines, and the repairs needed would have put them beyond the couple’s limited budget. I don’t know how many offers they wrote but they were not having luck.

As my friend detailed the many days and hours she spent with this couple, she said it was seeming increasingly unlikely that they would make it into the market. I paused as I asked her, “Do you think we have hit the bottom here in Sonoma County?”. She said yes–good properties are selling extremely fast and sometimes at over asking price. I had to agree. What had seemed a consistently active but still laid back market this winter was falling into high gear as the days got longer. As some of my buyer clients and I surmised in January and February, we felt that things would be much more competitive as spring arrived, and that seems to be true. In fact, the southern part of Sonoma County, in Petaluma was already scorching hot at Christmas and New Year’s time. And that same scorch-ability (sp?) seemed to be tracking north along the 101 corridor.

The sheer activity level, the vast number of first time buyers and investor clients looking for rental property, and the declining number of new listings have all been detailed here over the previous months. In December, new sales exceeded new listings for the first time in many months, and, beginning in February it seems to us that the bottom was reached and had passed some entry level buyers by.

That said, with only 3-5 homes selling over $1 Million dollars in Sonoma County between December and February, and the mid-ranges still sluggish and all over the map, it seems that properties priced above $350,000 (+-) are still seeking equilibrium. It is a real challenge in these price ranges in communities from Healdsburg to Santa Rosa to Sebastopol to know exactly where new listings this spring and summer should be priced to attract a buyer sooner than later. Clearly there have been a number of sales in all three communities this early spring that give some hope at these price points that buyers and sellers will come to terms. It seems that the properties that are successfully selling in the mid-ranges are price 10 to 20% or so below the prices of the last couple of years. Only time will tell this spring what the market has in store for mid-tier properties and upper-end properties. But the fact that the bottom seems to have been touched on the low end, bodes well for eventual market stability.

posted by Pam Buda // 1 Comment »

Been Down So Long It Looks Like Up To Me

filed under: Buyers, Market updates posted on February 25th, 2009

w_beendownsolong.jpgThe title of my last blog post was so upbeat I was a tad embarrassed on reflection.  Was I just drinking the real estate Koolaid?

 If you read the body of the post last week, you’d realize that my comments were a little more nuanced, but there was good reason for my optimism. I was in the midst of a multiple offer competition on a property in Healdsburg (my buyers are now in escrow and very happy), there were many properties going into escrow in the last couple of weeks in Sonoma County, and not just in the bottom end of the REO pool. Some really special country properties in Sebastopol and Graton that interested a number of my clients sold within a week of coming on the market before people could even get up here from out of town to see them. Open houses were packed all over the county. My transaction coordinator, Alise Posman, had 10 newly opened escrow files on her desk Monday morning and she is only one of several TC’s at our office.

It seems that there is a lot of pent up demand, and people with cash are deciding to invest stuffingmoneyunderthemattress.jpgin real estate here rather than stuff it under a mattress. Some are buying rentals, some are buying homes for the first time. Some are buying weekend homes, or rentals that will eventually become their wine country retirement homes. Some are searching for horse properties and there are some great deals at a variety of price points.

That said, I felt a little sheepish about the headline, given the brutal reality of current conditions in our country. The old title of Richard Farina’s 1966 book came to mind: “Been Down So Long It Looks Like Up To Me”. I guess we are taking these signs of life as encouragement where we can this spring.

firstspringbulbs.jpgNo one has any illusions that happy days are here again but there are little glimmers of hope, kind of like the first bulbs coming up in the spring. It will be interesting to see how this year unfolds. But don’t believe if you are a buyer that you will be without competition for the best properties, well-priced and in good condition this spring. If you are a seller take heed, and do what it takes to be perceived as a deal right out of the chute. You might be pleasantly surprised.

posted by Pam Buda // Comments Off on Been Down So Long It Looks Like Up To Me

Sonoma County Real Estate Market sizzling hot up to $1 Million

filed under: Market updates posted on February 18th, 2009

But not over a million.  That part of our market is very slow.  But signs are very encouraging for a more balanced market in 2009 at all price points under a million.  The experience of most Sonoma County realtors I know is that buyers are out if force for January, following a very busy holiday season.  The big difference is that we are finally seeing sales movement at prices between $400,000 and $1 million, as buyers in those price ranges seem to be stepping off the fence. Both single family homes and condos are selling at a rapid clip. More details to come but here is a quick snapshot for single family dwellings in all price ranges through January 30, 2009.

sonomacountyrealestatemarketdynamicsjan2009.jpg

posted by Pam Buda // Comments Off on Sonoma County Real Estate Market sizzling hot up to $1 Million