By Gerrett Snedaker
In mid-March 2020, the COVID-19 pandemic was declared and all parties were urged to “shelter in place”. This essentially shut down the residential real estate industry until April 2020. The market then accelerated rapidly from May to October. Statistical comparisons from one year to the next will therefore be distorted by these market aberrations created last year. This year’s closings are more “normalized” than the August 2020 closings, so it will look like a “slowdown” in an otherwise healthy market.
North Bay Real Estate Trends for August 2021
For all areas covered by our Multiple Listing Service (BAREIS), which includes Lake, Marin, Mendocino, Napa, Solano and Sonoma counties, there was an inventory of 2,064 homes and condominiums for sale at the end of the month. August. Inventory is 10% lower than a year ago (2,795) and 3% ahead of last month’s inventory (2,007). Sometimes the inventory has exceeded 10,000 homes in the BAREIS area. There were 1,734 sales for the month of August. This number is 7 percent lower than a year ago (1.856) and slightly higher than last month’s pace (1,726).
Prices normally peak in August and remain stable until January. National forecasts predict an increase in inventories and a slowdown in price appreciation in the coming months and into 2022. This seems to be happening in Wine Country and we’ll see if this is a seasonal trend (the end summer market) or a longer term direction. .
I’ve been tracking a data point I call the “Price Reduction Ratio” (PRR) for the last six months or so. Across the country, one would expect 30 to 35 percent of homes put into MLS to have a price cut before they are finally sold. Currently, for the country as a whole, the ratio is 27%, down from a low of 15% in April of this year. For August 2021, of all the homes closed in our Wine Country Markets, the range was 18% (Sonoma County) to 26% (Mendocino County). Conversely, the ratio of homes sold above the original list price (PLO) ranged from 56 percent (Sonoma County) to 34 percent (Mendocino County). It was 48% in Napa County. The average price reduction rate for all regions fell from 29% in September 2020 to 22% in August 2021, while home sales above the original list price fell from 33% to 46% over the course of the same period. In our Wine Country market, the low PRR was 14 percent in May and the high OLP ratio was 55 percent in May.
Mendocino County: The inventory of homes and condominiums available in Mendocino County at the end of August stands at 170. This is 10% above the August 2020 inventory (154 ) and 9% above last month’s inventory (156). New sales (74) in Mendocino County in August were 6% higher than in August 2020 (70) and 30% higher than last month (57). There is now a 2.3 month inventory in Mendocino County based on the existing sales pace. The average number of days on the market for the 70 homes sold in Mendocino County in August is 45 days. For the purposes of our MLS (BAREIS), “days to market” represents the time the property is first listed in MLS until the date the property becomes “pending” ( all conditions removed). On average, it can take an additional 0-30 days for properties to close after they are put on hold. The median price for homes closed in August in Mendocino County was $ 505,000. That’s 2% ahead of the August 2020 median price ($ 493,000). Homes in Mendocino County are in high demand and prices are rising rapidly.
Ukiah: The inventory of homes and condominiums for sale at the end of August in Ukiah was 35 units. That’s 9% ahead of the August 2020 level (32) and it’s 17% above last month’s inventory (30). There were 20 new sales for August. This is 23% lower than the number of sales in August 2020 (26) and it is a sale ahead of last month’s sales (19). There is now a 1.8 month inventory based on the current pace of sales. The days on the market for the 19 close of the last month are 50 days. The median price of homes sold in Ukiah over the past year has ranged from $ 370,000 to $ 519,000. The median price was $ 475,000 for homes closed in August.
Hopland and Talmage: The inventory of homes and condominiums for sale at the end of August in Hopland and Talmage is four units. This compares to 13 homes in inventory at the end of August 2020 and five homes in inventory last month. There were no new sales for August. This compares to three sales in August 2020 and two new sales last month. There were three closings in the Talmage-Hopland market last month with an average of 40 days in the market.
Redwood Valley and Calpella: The inventory of homes and condominiums for sale at the end of August in Redwood Valley and Calpella was 18 homes. It’s 27% above August 2020 level (14) and it’s 50% above last month’s inventory (12). There were five new sales for August. This compares to four sales in August 2020 and three new sales last month. There is a 3.5 month supply of inventory based on the current sales pace. The median price of homes sold in Redwood Valley / Calpella over the past year has ranged from $ 400,000 to $ 725,000. There were six closings in Redwood Valley / Calpella in August at a median price of $ 587,000 and homes sold in 97 days.
Lake County: This is my first time sorting the Lake County data and the MLS is different from our other counties and has different ratios – so it will take me a while to figure this out.
The inventory of homes and condominiums available in Lake County at the end of August stood at 459. This is 55% above the August 2020 inventory (297) and it is also higher than last month’s inventory. Closed sales (117) in Lake County in August were 3% below the August 2020 pace (121) and were slightly below the pace last month. There is now 4.8 months of inventory based on the existing sales pace. This has been increasing steadily since April of this year. The median number of days on the market for homes sold in Lake County in August is 13 days. Usually the “market days” are plotted from the listing date to the pending date, so the close date would be a bit longer. The median price for homes closed in August in Lake County was $ 319,000. That’s 6% ahead of the August 2020 median price ($ 300,000).
For more information, please contact Gerrett Snedaker at 707-939-2009 or [email protected]