Stay Up-To-Date on Industry Trends & Forecasts
Some Post-Covid Wisdom:
- After bad times come good times.
- When markets ‘shut down’ or slow dramatically, their recovery can be equally dramatic.
- All extremes lead to artificial disruptions and the need for rebalancing.
- Don’t believe all the predictors and opinions out there: many are not that informed, and some will do anything to generate a headline. Many predictions are, educated or not so educated, guesses.
- When the going gets tough, the tough get going. Tough times fuel us to be tougher and more resilient.
- Always have savings on standby to last you for at least 6 months of living expenses.
- Evaluate and re-evaluate all your insurance policies regularly.
- Stay close and be kind to colleagues, friends and relatives, not just when you need them.
- Time is a Luxury: Covid taught us how precious every moment of every day truly is.
- Having a comfortable home, a personal sanctuary is priceless.
Did You Know?
- About 38% of owner-occupied housing homes have no mortgage, according to Census Bureau data. And about 27% of March US existing-home sales were purchased in cash. (NAR)
- In April, there were about 991,165 total listings in the US, up 6.2% from April 2022 and the first year-over-year increase for the month since 2019…..still well below the 2017 housing inventory levels: down 38.6% from 1,616,528 in April 6 years ago. (Marketwatch)
- California Representative Jimmy Panetta in March introduced legislation with Mike Kelly from Pennsylvania that doubles the amount of money homeowners can exclude from declaring on their taxes when they make a profit on the sale of their home. Under the “More Homes on the Market Act,” when a homeowner sells their home, they’ll be able to exclude $500k for single filers and $1 million for joint filers. It would also be indexed to inflation moving forward. Currently, the legislation only allows for single filers to exclude $250k in gains and $500k for joint filers. The amount, set in 1997, hasn’t changed in 26 years. (Marketwatch)
- 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)
Tools
- Sonoma County Short-Term Rental Ordinace
- Sonoma County | Vacation Rental Ordinance Update Map
Trends & Forecasts
- Bay Area Housing Prices Grow Despite National Trend of Dwindling Home Values
- Housing Market Indicators Monthly Update – Housing and Urban Development
- Housing Market Predictions For 2023: Are Home Prices Finally Becoming Affordable?
- Sonoma County Market June Flipbook
Market Update
Napa, Sonoma & Solano Counties: Home Price Map
We saw a slight uptick in the number of listings on the market in May of this year (140) over last year’s number (132), a 6% increase. However, the median list price of those listings was up considerably from $1,452,000 to $1,790,000, a 22% increase year over year. Both new deals under contract (pending sales) and closed sales in May were both down 28% and 31% respectively.
One of the most dramatic variances this month is the difference between the median list price and the median pending and sales prices in May of 2023. At a median list price of $1,790,000, the median pending and closed sales price of $1,199,000 is approximately 30% lower, perhaps indicating the overly optimistic (dare we say unrealistic?) belief that sellers continue to hold on to.
Sonoma Valley continues to outpace most other regions in Sonoma County with the exception of Healdsburg and Sebastopol, which both have a slightly higher median sales price, but far fewer numbers of listings, pending and closed sales. And compared to our Napa Valley neighbor, Sonoma Valley continues to rank favorably in both median list and sales prices.
Looking ahead, we feel that if buyers continue to sit on the sidelines and not move forward on purchasing, when interest rates do start to decline (as we know they eventually will) there may be more inventory to choose from, but there will also be more buyers competing for those listings. If a buyer qualifies, it may be more advantageous to go ahead and bite the bullet with a (relatively) high interest rate of today with the anticipation that they would be able to refinance within a few years at a lower rate. Hard to believe that we will ever see the sub-3% rates coming back…but we never say never.
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.
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