Stay Up-To-Date on Industry Trends & Forecasts
Did You Know?
- Among US homeowners who say they plan to sell in the next 3 years, 67% would be willing to wait until mortgage rates drop. (Credit Karma)
- A new kitchen, bathroom, roof, solar power and new energy efficient windows have statistically resulted in adding value to a home’s sale price. (WSJ)
- “I think people forget that the vast majority of sellers are also trying to buy at the same time. When conditions are tough for buyers, it can hold back selling inventory as well.” – Danielle Hale, Realtor.com
Buying vs Renting
- The Zillow Rent Index showed that year-over-year rent growth slowed from 4.8% to 4.1% in June. We know that inflation is stubbornly high from the lag in shelter costs, but slowly but surely, this number is moving lower and starting to catch up. (MBS Highway 07/24/2023)
- Home price story different depending on where you live.
- Rent or buy? Here’s how to make that decision in the current real estate market.
- Rent vs Buy calculation. Another tool to help make the decision. (PDF)
- In the current environment, the majority of the focus of home buyers is the rate on the loan. Important following factors:
- Does it make sense to pay points to get the lower rate. The best way to answer this question is – how long will it take the cost to get the rate be offset by the savings. If its longer than a year, it might not make sense given the forecasts of a lower rate.
- Do I need a 30 yr fixed? Arm rates (if you qualify for them) are priced slightly lower and might be a better choice.
- Do I need to put 20% down? In some cases, by putting less down, you not only preserve your cash but your rate can also remain the same.
Tools
- Is the Remodeling Boom Over—or Just on Pause?
- Remodeling Impact Report – NAR
- Remodeling Impact Report: Outdoor Features – NAR
- 2023 Cost vs Value (PDF)
Trends & Forecasts
“With consumer price inflation calming close to the Federal Reserve’s desired conditions, mortgage rates look to have topped out,” Lawrence Yun, chief economist at the National Association of Realtors (NAR) said in a statement on pending home sales Thursday. “Given the ongoing job additions, any meaningful decline in mortgage rates could lead to a rush of buyers later in the year and into the next.” (yahoo finance 07/27/2023)
- Housing Market Predictions For 2023: When Will Home Prices Be Affordable Again?
- Napa, Sonoma & Solano Counties Home Price Map
- Sonoma County Market Flipbook
Market Update
While the market in Sonoma County in July reflected a typical active selling season and recorded the highest number of listings going into contract so far this year, Sonoma Valley, while still active, did not reflect much increase in the number of new pending deals – up by only 3% year over year.
We did see a surprising jump in both median list price at $1,656,500 a 12% increase over July of ’22 and the median sales price at $1,297,000 a 35% increase from 2022. Almost all gains in Sonoma Valley stats were positive year over year with the exception of the days on market – which increased by 43%. But this should be kept in perspective as the actual number of DOM only went from 33 to 47 still a relatively short period of time in the big picture.
The low number of active listings we have been tracking for some time now continues to keep prices high here in the Valley. Reflecting on the actual months’ supply of inventory – which is the length of time it would take to sell all inventory if no new listings were to come on the market, we see that in Sonoma, we have only 3 months’ supply of listings – still considered a sellers’ market – which has remained fairly stable since last year at this time.
Looking ahead, we will not be surprised by a somewhat sluggish August and then a burst of activity in September and early October, as this has been a long-experienced trend, especially in pre-Covid years. Vacations end, kids are back in school, and the major holidays have not yet started. While it seems too early to be talking about that time of year, with the announcement of “Pumpkin Spice” starting in August, we recognize that Fall and Winter are right around the corner!
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