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Charleen Price - GRI
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Home » Char’s July 2023 Blog – Market Update

Char’s July 2023 Blog – Market Update

Stay Up-To-Date on Industry Trends & Forecasts

 

Did You Know?

  • While the US may enter a recession , it may be felt very differently from region to region. Some may even experience growth while others – even neighboring states or cities – are experiencing the exact opposite. The same is true for inflation: some cities right now are in the midst of high inflation – especially as it relates to housing – while others are experiencing DEflation
  • A good rule of thumb for buyers. First step – call your current insurance carrier with the address of the property you have interest in prior to writing the offer. Second, should your offer get accepted – ask the insurance carrier to provide a certificate of insurance confirming their commitment to insuring your new property. Third, provide the seller with a copy of that certificate.
  • Uninsurable? We all saw what happened to the banking world when people realized their deposits above the $250k were not insured as SVB wobbled, and triggered more carnage with Signature and First Republic… now, several insurers are pulling out of areas with a high risk probability of flooding, fires, hurricanes, tornadoes, etc….. What happens to a home’s value if you cannot insure it? The monthly cost of insurance is now becoming a key consideration when buying. (WSJ)

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Market Update

With all of the conflicting data being cited in the press of late, it is truly hard to figure out what is happening – not just in the economy as a whole, but in every aspect of the economy, and maybe especially in real estate. While we hear that listing inventory and sales are down and we are (or may be, or may not be) headed for a recession, we aren’t always sure that this is true for every area. To that end, the statistics we provide and observations we make monthly are hyper-local as we feel all real estate is.

For Sonoma Valley, we see that the number of listings was up month over month by about 23% and the median list price of that inventory ran about 17% higher in 2023 vs. 2022 ($1,722,000 vs. $1,475,000). The median sales price June over June came in at 10% higher from $1,182,750 vs. $1,295,000 and the number of days on market was down by about 4%. Yet, closed sales were down almost 40% over the same period. So, in some ways, it’s just as difficult to figure out our own local market as it is to read the market regionally, state-wise, or nationally

It does feel like sellers are still cautious about putting their homes on the market, but a bump in inventory is a good sign as are the higher median sales price and days on market statistics. However, as we look toward the remaining summer months, some of our numbers will be influenced by the Fed’s decisions on interest rates, even as it feels like buyers are getting more used to the sub-7% rates. Perhaps a greater concern now is the ability to obtain “reasonable” homeowners’ insurance. With two major direct insurers deciding to no longer write new policies in California, this may be a greater challenge than that of higher mortgage rates.

Please note, all information is for single family residences in the Sonoma Valley as reported to BAREIS, the local multiple listing service through Broker Metrics.

This BLOG is intended to provide information and content of value. Suggestions about what you would like to see more of, feel free to email me and certainly feel free to forward to friends and family.

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