Year over year statistical data for Sonoma County ending February 2021

Quick Facts

The first statistics we look at is our monthly pricing trends. The pending stats are what we consider the most important because they can give us insight as to where the market is heading. Since July 2020 we have seen a steady decrease in pending sales through the end of the year. This is in part a natural seasonal adjustment and well above our pending numbers from a year ago. Our current pending properties as of February 2021, is 488 For the same month a year ago we see a pending number of 355. This is a +37.5% increase in sales. 

The next number we look at is the new listings number. this is the number of new properties listed for sale during a given month. Here the trend is even more concerning since we are in a listing drought.  Look at the number of new listings in February 2021 (534) and compare this number to the same month a year ago with (760) in new listings. That’s a decrease in -29.7% inventory. This is however a +1.7% increase from January 2021. You can see a consistent decline since the announcement of the COVID-19 pandemic and the lock-down. 

Since are able to look at our neighboring counties like Napa, Solano and even lake County we know these markets are performing very differently. IN other counties we have seen a very strong decline in inventory levels as far back as May of 2020. This not the case for us here in Sonoma. In fact, it’s only been since December that we have seen a severe shortage in properties coming to market for sale. 

Let’s look at our final set of numbers. Sold properties. We already know that if it says pending we can count it as a future sold. This is why we don’t put as much weight into what has already sold vs. what is pending. That being said a trend of sold properties moving one way or another can predict market expectations as well. 

Here we see our February 2021 sold number at 369. But wait you say! Why is this number different than the January pending number of 452? This is because not all the pending sales in a month will close the same month. Many of the pending sales tail into the coming months which is why sold properties are a real indicator of the true market. It’s where you are at right now. The good news for us REALTORS is this number is up +17.1% compared to February 2020 with only 315 closed sales. In fact, our sold properties outnumber their year over year numbers consistently from June 2020 through today. We did experience a slight slump when the pandemic was announced in March, April, and May. But things started to take off in June.  The RED FLAG here is lower inventory and more sold combine for a stiffening sellers market. Already we are seeing that it is difficult to find buyers a home and as you will see in the following information prices going up.

I think what’s most interesting is the continued list price which is always far above what the sold price is. This in part is because we have a wealth of expensive homes that add weight to the top end of this graph. You can see here we peaked in August 2020 with a average sold price of $910,000 which at the time was a steady and strong increase from early 2019. However, since then we see a dip and then more of a settling in number as today’s average Sold price for February 2021 was $862,000. This still represents a +18.9% appreciation and from what we have learned from our listed and sold inventory this number is most likely going up.

Our Days On Market (DOM) remains pretty steady having dipped to a low of 47 days from a 12 month peak of 86 back in January 2020. Today we sit right at 60 average days for a property to sell. We can also see that our List Price to Sold Price ratio is at 100% for the first time in over a year as well. This is as we shared earlier is due to lower inventory numbers and stronger sales. A trend we predict will continue in the coming months. 

This leads us to our monthly supply of homes. Today we are right at 6 weeks worth of inventory which is down a week from January 2021 but a full month lower than a year ago. Where are the sellers at? Are consumers not selling because they don’t have any better options to move up or move away. We know how beautiful Sonoma is so I am not convinced we have sellers looking to bail on California and head to Texas as CNN would have us believe but something has a strong hold on the sellers and unless we start to see increased inventory we are headed into what our surrounding counties are experiencing which is homes selling in a few days with 10+ offers and buyers struggling to find a home. 

Case Study:  Robin and Sam purchased their first home back in 2015, The paid $463,000 (44.7% less than today) for a nice 3 bedroom and 2 bath starter home. They financed the home with 3% down with an interest rate of around 4.5% (historical rates from 2015 fluctuated from 3.8% to as much as 4.75%) they have a current house payment of $2,482. Flash forward to November 2020, and Robin and Sam’s home is now worth $839,000 which gives them $462,300 (This includes their original downpayment and payments for the 5 years they have lived in the home) for a down payment and closing costs on a new home.  If Robin and Sam put $400,000 down on a $1,000,000 4 bedroom, 3 bath home (Their Dream Home) They can finance this home at 2.65% giving them a payment of $2,940. Can you see why everyone wants to buy a new home? This isn’t the only reason buying a home is hot right now.

Another reason is the pandemic itself. What has transformed in the last year has been a significant change in our work-style. Commuting to work, to the city, having to live close by for both convenience and necessity did not allow urban dwellers much opportunity to seek the suburban life they always wanted. That has changed. Imagine you work in San Francisco and to be close your choices are the East Bay Berkely etc or Marin. Both very expensive home values and very expensive rental markets. Imagine you are renting a 2 bedroom, 1 bath condo in the city for $6,500 a month, or Marin for $4,500 a month, or Berkely $3,500 or more. Now you can live anywhere you wish as long as it is within reason and ok with your employer. You work from home and or occasionally go to an office. The opportunities are wide open. You can buy anywhere in Sonoma County for the price of rent where they live. The point is we have a pool of buyers looking to settle down and plant some life roots in our community and they are excited they can own a nice home for less or for as much as they have been renting. The American Dream

While we always experience a seasonal slowdown this time of the year having only 6 weeks of supply is a bit scary. Attention all sellers.  Now Is The Time!

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The opinions expressed in this report are those of Don McDonald, Founding partner, and REALTOR with RE/MAX Elite Partners brokered through RE/MAX Gold. They are not in any way intended to express what RE/MAX, RE/MAX Gold or any other agent or brokerage may think. It is my honest analysis backed but some market data. Check back each month around the 25th or so for an update as we continue down this path. 

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