We are in the middle of the busiest buying and selling season of the year, so I thought it would be interesting to take a look at some of the numbers compared to the last decade.
One data point that sticks out more than anything is the volume of houses currently for sale in the +$1m range. Looking at Sonoma County overall there are 413 houses currently for sale for over $1m, more than at any time over the last ten years (light green in graph above).
You need to go back as far as 2006 to find a year where there were more houses for sale than at present. Over the past quarter there have been over 120 $1m+ new listings (blue line above) coming on every month. This too is a ten year high.
Those listings are selling on average within about 60 days of being on the market (this includes escrow) compared to over 10 days for the first quarter of the year. We are also seeing the average sales price to list price creeping back up to 97%. In other words, the average house over one million dollars is selling for a discount of 3% against the list price.
Healdsburg $1m+ Listing Market
If we look at a specific market such as Healdsburg, we see a similar picture. There are 67 properties for sale for over $1m dollars, this is 20 per cent more than at any time in history. There are 37 properties for sale over $2m. The average number of new listings coming on the market per quarter is also at a 10 year high.
What is really interesting is when you look at the rate at which all of these new listings coming on the market are selling through (see graph above). In February, the amount of time it would take to sell all the $1m listings on the market if they continued selling at the February rate was nearly 3 years. Now it would take just 4.5 months to sell all the $1m inventory in Healdsburg! This just shows how much buyer activity has increased over the past few months.
The one big difference in Healdsburg, compared to the rest of Sonoma County, is that properties are still taking on average, over 100 days to sell compared to 60 days across the county. While I don’t have data to support it, I think there is also a stark difference between the amount of time it takes to sell a $1m property outside of a 20 min walk into town compared to a property in the historic downtown.
You will typically pay a 30% premium for a house in downtown Healdsburg but even with that premium, houses sell more quickly because out of town buyers are always looking to purchase downtown properties.
So, what does all this tell us? With interest rates so low and predicted to go lower still, buyers are out in force making the most of all the new inventory coming onto the market.
It is without doubt one of the best times in recent years to be a buyer with the magic combination of choice and affordability. In addition, unless you are looking at a property that is newly remodeled in a great location, you also have some bargaining power because of the wider choice.
For sellers the story is a little more complex. Because there is so much inventory out there, it is more important than ever that you really work hard to prep your property for sale. I wrote a separate post here on the things that you can do to maximize value. It is also important that you are realistic in your pricing.
There are a lot of properties that are sticking around because sellers are pricing their properties based on prices continuing to increase since last June. This does not reflect the market we are currently in. Even with a property price correctly, you can expect it to be on the market for between 60 and 100 days so if you do need to make a move, you should think about this in the timing of your sale.