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Wine Country real estate trends in August 2021: Year-over-year comparisons

Ukiah Daily Journal logo Ukiah Daily Journal 9/28/2021 Submitted

By Gerrett Snedaker

In mid-March 2020, the COVID-19 pandemic was declared and all parties were told to “Shelter in Place.”  This basically shut down the residential real estate industry through the month of April 2020. The market then accelerated rapidly in May through October.  Year-over-year statistical comparisons are therefore going to be skewed by these market aberrations created last year. The closings of this year are more “normalized” than the closings of August 2020 so it will look like a “slow down” in an otherwise healthy market.

North Bay real estate trends for August 2021

For all of the 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 August. Inventory is 10 percent below that of a year ago (2,795) and it is 3 percent ahead of the inventory last month (2,007). At times, the inventory has exceeded 10,000 homes in the BAREIS region. There were 1,734 sales for the month of August. This number is 7 percent below a year ago (1.856) and slightly ahead of the pace of last month (1,726).

Prices normally peak in August and stay level through January. National forecasts predict increasing inventory and a slowing of price appreciation in the coming months and into 2022. This seems to be happening across Wine Country and we’ll see if this is a seasonal trend (the end of summer market) or a longer term direction.

I have been following a data point I call the “Price Reduction Ratio” (PRR) for the past six months, or so. Across the country, one might expect that 30 to 35 percent of the homes put into the MLS will have a price reduction before they eventually sell. Currently, for the entire country, the ratio is 27 percent, up from a low of 15 percent in April of this year. For August 2021, of all closed homes in our Wine Country markets, the range was from 18 percent (Sonoma County) to 26 percent (Mendocino County). Conversely, the ratio of homes selling in excess of Original List Price (OLP) ranged from 56 percent (Sonoma County) to 34 percent (Mendocino County). It was 48 percent in Napa County. The average Price Reduction Ratio for all areas has gone from 29 percent in September 2020 to 22 percent in August of 2021 while the sales of homes in excess of Original List Price went from 33 percent to 46 percent over 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 percent above the inventory in August 2020 (154) and it is 9 percent above the inventory last month (156). New sales (74) in Mendocino County in August were 6 percent above the pace of August 2020 (70) and they were 30 percent above the pace last month (57). There now is a 2.3 months supply of inventory in Mendocino County based on the existing sales pace. The average Days on Market for the 70 homes sold in Mendocino County in August is 45 days. For the purpose of our MLS (BAREIS) “Days on Market” represents the time from when the property is first listed in the MLS to the date the property goes into “pending” (all conditions removed) status. On average, it can take anywhere from 0 to 30 additional days for properties to close after going pending. The median price of the homes closed in August in Mendocino County was $505,000. This is 2 percent ahead of the median price in August 2020 ($493,000). Mendocino County homes are in high demand with prices rising quickly.

Ukiah: The inventory of homes and condominiums for sale at the end of August in Ukiah was 35 homes. This is 9 percent ahead of the level of August 2020 (32) and it is 17 percent above the inventory last month (30). There were 20 new sales for the month of August. This is 23 percent below the number of sales in August 2020 (26) and it is one sale ahead of the sales last month (19).  There is now a 1.8 months of inventory based on the current sales pace. The Days on Market for the 19 closings last month is 50 days. The median price of the homes sold in Ukiah in the past year has ranged from $370,000 to $519,000. The median price was $475,000 for the homes that 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 homes. 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 the month of 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 days on market of 40 days.

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. This is 27 percent above the level of August 2020 (14) and it is 50 percent above the inventory last month (12). There were five new sales for the month of August. This compares to four sales in August 2020 and three new sales last month. There is a 3.5 months supply of inventory based on the current sales pace. The median price of the homes sold in Redwood Valley/Calpella in 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 the homes sold in 97 days.

Lake County:  This is the first time that I’ve sorted through Lake County data and the MLS is different than our other counties and has different reports – so it will take me a while to get a handle on this.

The inventory of homes and condominiums available in Lake County at the end of August stood at 459. This is 55 percent above the inventory in August 2020 (297) and it is also above the inventory last month. Closed sales (117) in Lake County in August were 3 percent below the pace of August 2020 (121) and they were slightly below the pace last month.  There now is a 4.8 months supply of inventory based on the existing sales pace. This has been climbing steadily since April of this year. The median Days on Market for the  homes sold in Lake County in August is 13 days. Usually “Days on Market” are traced from listing date to pending date, so the closing date would be somewhat longer. The median price of the homes closed in August in Lake County was $319,000. This is 6 percent ahead of the median price in August 2020 ($300,000).

For additional information, please contact Gerrett Snedaker at 707-939-2009 or gsned@winecountrygroup.com

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