San Francisco North Bay housing market gets unseasonably hot in March

Here’s one sign of how superheated certain North Bay housing markets can get: A 3,200-square-foot home in the hills east of Rohnert Park was only on the market 21 days, received seven offers and sold at the beginning of this month for $1.615 million, which was $315,000 over the asking price.

While that seller exited the North Bay for Hawaii partly out of fatigue with wildfires and power shutoffs, there are buyers coming from the Bay Area to replace them — if they can find a home to buy, according to Jeff Schween, a Compass agent who sold that home.

“Markets are compressing, with more demand and less supply, so there is a chasm between the two,” he said.

And that gap is widening, according to Gerry Snedaker, broker of Better Homes and Gardens Real Estate Wine Country Group. The inventory of homes and condominiums for sale in Sonoma, Solano, Marin, Napa, Mendocino and Lake counties last month was 1,450, according to BAREIS multiple listing service figures he cited. That supply is 41% below a year before, when the lockdowns early in the pandemic upended the market for new listings, and last month’s inventory had just 19 more dwellings available than at the end of February.

Meanwhile, North Bay sales last month (1,858) jumped 34% from February (1,386) and were 72% higher than the pandemic-pinched market of March 2020 (1,082).

Sonoma County had a 0.9-month supply of homes and condos to sell at the end of March, given 574 listings at month end and 667 sales that month, the MLS data showed. Napa County’s supply slipped to 1.2 months in March from two months in February. Marin County had a 0.7-month supply last month.

Snedaker likes to gauge where pricing is headed by following the ratios of homes that sell below or above their asking prices. Nationally, roughly one-third of MLS listings are sold for less than the asking price, but last month that proportion in the North Bay ranged from a low of 17.5% in Mendocino County to a high of 21%, he observed from the data. And the ratio of sales over the asking price last month started at 37% of Mendocino County deals and went up to 54% of Sonoma County transactions.

The North Bay housing market echoes what’s happening nationwide. Though overall sales were down in March for the second consecutive month, pricing continued to have upward pressure, according to the National Association of Realtors. All regions of the country had double-digit gains in pricing, pushing the countrywide median price for existing homes up to a new record of $329,000, up 17.2% from a year before, and the median for single-family dwellings jumped 18.4% to $334,500, also a record.

Robert Eyler, a North Bay regional economist with Sonoma State University told the Business Journal that strong median home price growth in 2020 is expected at this point to continue into this year.

“Low interest rates and preservation of high-income jobs (are) helping fuel demand," Eyler wrote in an email.

As of the end of March, national housing inventory had a slight monthly rise to 1.07 million units but was down by 28.2% year over year, the real estate trade group reported. Time on the market fell to 18 days, also a record low.

Schween is worried about “buyer fatigue” among all the prospective buyers whose bids don’t win the home keys. In this and previous boom markets, he’s seen some sit out of the market for a while because of the emotional toll of vying for a dream house.

“I’m sure we will see this in the market, but whether it will be this year or next year will be a factor of the volume of people who show up in the marketplace,” he said.

Jeff Quackenbush covers wine, construction and real estate. Before the Business Journal, he wrote for Bay City News Service in San Francisco. He has a degree from Walla Walla University. Reach him at jquackenbush@busjrnl.com or 707-521-4256.