Marin, Napa, Sonoma home real estate markets see rising inventory, pickier buyers
As warm, dry weather finally returns to the North Bay, local real estate experts say the longer time homes are staying on the market in some areas and some price reductions necessary to get them to sell could be indicators that it’s more than the annual summer slowdown in activity.
Sales in Napa and Sonoma counties in the first five months of this year were off 11% by volume from that pace a year before, down 17% in dollar volume and decreased 7% in average selling price, according to the latest Bareis listing data analyzed by Better Homes and Gardens Real Estate|Wine Country Group.
Sonoma County residential transactions through May totaled 3,645 (down 9.8% from a year before) for $2.5 billion (down 16.6%) at an average price of $673,111 (down 10%). For Napa County, 940 deals (down 16%) were valued at $794 million (down 14.2%) at an average price of $845,085 (up 4.2%).
“It was a little unexpected that we were down so much in overall volume,” said Gerry Snedaker, broker and partner of Wine Country Group. “It partly reflects the seasonal downturn and the market conditions having reached a lull.”
Ted Strodder, a broker associate in the Greenbrae office of Golden Gate Sotheby’s International Realty, said the typical July through September slowdown in Marin County touring and deal-making has arrived early for the past two years — in May.
In May, 341 Marin homes and condos were sold, up 1.1% from a year before, according to data compiled by Strodder's office. Average sale price was $1.596 million, down just 0.9%, and median price $1.26 million, 1.6% lower.
At this point, softness in demand and activity isn’t in every price range or area of the county, Strodder said.
“It’s not necessarily a strong seller’s market like past eight years, and it is not necessarily a buyer’s market,” he said.
A rule of thumb for a healthy market, with enough homes available for interested buyers, is one-third of the listings in any price range in escrow at any given time.
But from the Great Recession until the past 12 months, a majority of Marin listings were in escrow, with many attracting multiple offers, Strodder said.
Another way to look at that the inventory of homes to sell is months it would take to sell through listings at the rate that deals are closing, Snedaker said. A balanced market has three months of inventory, but four months’ worth is trending toward putting buyers in command.
Sonoma County overall has two months’ supply at the current pace, 560 new sales in May, up 21.5% from a year before. But the inventory of high-end homes in the county (280 listings over $1.4 million) was 7.2 months, up 50% from a year before.
Snedaker attributed that backup in high-end sales partly to the fires, which accelerated demand for alternative housing.
But the 7.8 months of inventory in Healdsburg as of May — the highest in eight years — could also reflect a growing challenge in marketing homes in upscale markets such as Healdsburg, Sonoma city and upper Napa Valley, Snedaker said.
“When I came up here in the 1990s, all the folks in San Francisco wanted to be in Napa Valley, and that has slowly morphed into Sonoma County,” he said. “If you’re driving from San Francisco to Healdsburg, you’re encountering more traffic, and we’re seeing that also with Highway 37 backups starting at 3 p.m. when getting to Sonoma (city) and Napa. That would depress our market a little bit.”