This report is generated around the 10th of each month once the previous months numbers have been posted. What we see here is a report generated for the Sonoma County Housing Market through November 2021. So we are always looking a month behind. Our statistics are derived from the Bay Area Real Estate Information Services (BAREIS) This is the Multiple Listing Service provider for all real estate brokerages in Sonoma County. If you have questions or wish to know a more specific account of your properties value and the timing of either selling or buying we are always happy to jump on a Zoom or meet with you at your property to evaluate and discuss a strategy. We can be reached via cell/text 707.580.3499 or email us at concierge@elitepartnersrealestate.com
There is talk on the streets about the market slowing and prices coming down. This could not be further from the actual market activity. Inventory remains the big elephant in the room. Yes we sold less homes in November 2021, 492 than we did a month ago in October 2021, 549 a whopping -13.6% less, but we always do. Season slow down happens every year. In fact a smart buyer would know this and understand that the holiday season is most certainly the best time to buy. Given most sellers are in need of selling and because there is less activity in the market a buyer may actually get a better deal or at least a real shot at buying the property. We actually sold +3.6% more homes compared to November 2020. We even out paced our pre-pandemic 2019 sales of 393 units. This represents a +25.2% increase in the last two years.
The real story is still in our inventory levels. The amount of homes we list for sale each month continues to be less and less. From October 2021 (615 units) vs. November 2021 (421 units) is -31.5% less. Year over year we are down -$46% and -57.3% respectfully from November 2019. If we are looking for the market to normalize we have a lot of work to do. The Federal Reserve concluded its December 14th-15th meetings, announcing it will speed up the taper of its asset-purchase program. The Fed also indicated it sees as many as three rate hikes in 2022. This could mean lower housing prices as in the past when interest rates climb housing prices go down. It’s basic math. As interest go higher the buying power goes down which means buyers can buy less. Sellers will have to lower prices if the expect to sell.
Our days on market has grown to 57 which is +21.3% month over month and and increase of +16.3% year over year. If history is consistent with our days on market (DOM) we will continue to see an increase over the next couple of months just like we did last November, December, and January. It is usually February when we see more homes come to market and the selling season starts again.
We have now witnessed the highest closed sales price in Sonoma County history. ($1,004,000) One Million, four thousand dollars is our new norm! This represents a +18.4% increase year over year. Homeowners are literally getting paid to own their home. Think about it. If you purchased a home 12 month ago for the average price of $848,000 you would have made $156,000 for the year or $13,000 a month. No wonder our work employment numbers are so out of whack right now. Owning a home is your job. LOL! All kidding aside, it has been very profitable to own a home over the last 6+ years.
What lies ahead with potential interest rate hikes and more inventory coming to market perhaps we will see a 5% to 10% depreciation in pricing which would be good for buyers and the market as a whole. Home equity remains very strong and default rates are at a 50 year low. This mean there is no real estate crash coming anytime soo.
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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