Sonoma County’s Housing Market
Check out Sonoma County Real Estate Market stats for the last twelve months.
The month of March ended with the number of properties sold continuing the month-over-month upward trend since the start of 2021 while the median sale price moved significantly upward during the month.
Residential inventory increased in March while the number of properties under contract increased dramatically month-over-month continuing an upward trend during the first quarter of 2021.
The average days on market continued a notable decline, going from just over fifty days in January to around 30 days in March, while the number of properties under contact continued a month-over-month increase.
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All information presented was obtained from BAREIS MLS for illustration purposes. Century 21 Bundesen does not guarantee the information reflected herein.
California’s Housing Market
The latest weekly data on California’s housing market suggests another strong month in January. Rates fell, the economic recovery continued, and the market remains very competitive. The one negative highlight is delays at the EDD, making unemployment claims look like they are improving when they are just behind.
Positive Market Trends Continue Through Month-End: According to CAR’s weekly analyses, the California housing market remains on a solid upward trend. The weekly survey of REALTORS® across the state showed more agents doing listing appointments, putting homes on the MLS, and entering escrow on new transactions last week. In addition, the MLS data shows that despite a big spike in the final week of 2020, which suppresses the annual comparison, January is likely to end nearly 30% ahead of 2020 levels for the month—maintaining the momentum carried over from the end of the year and perhaps even gaining steam.
The Economic Recovery Continued in Q4: The Bureau of Economic Analysis released its estimate for economic growth during the final quarter of the year and it showed that the recovery continued during the final months of the year despite public health headwinds. Overall, the U.S. expanded by 4.0% on an annualized basis, driven by broad-based growth from businesses and consumers. Consumer spending did downshift from its Q3 levels as government assistance played a smaller role.
Coronavirus Cases Continue to Fall: The number of new cases of COVID-19 in California continues to dwindle with the 7-day average at its lowest levels since early December when the holiday surge was ramping up. This is significant because the 7-day average is the primary indicator the state focuses on when determining whether to tighten or loosen restrictions. New cases remain elevated from levels seen during the summer, but the progress over the last few weeks has been significant and consistent.
Interest Rates Fall in 2nd Consecutive Week: Interest rates dipped to 2.73% last week after a small decline the previous week to 2.77%. Rates had risen to nearly 2.8% in the wake of the Georgia Senate runoff elections, but 10-year Treasury rates have been declining alongside mortgage rates the past two weeks, which suggests that rates are not on an upward trend over the short run.
California Housing Market Remains Unseasonably Competitive: Despite January typically representing a much smaller share of the year’s home sales, competition remains fierce. The percentage of active listings on MLSs across the state that have had a price reduction has been falling. At 21% last week, the share of reduced-price listings has declined at every price point in 7 of the past 8 months. In addition, homes priced below $1 million have experienced much sharper declines.
Construction Spending Follows Housing Starts Upward: Following a blockbuster report for new housing starts in December, the Commerce Department reports that spending on new projects followed suit—rising by 1.0%. However, the headline growth was depressed because of a pullback in nonresidential spending. Looking at residential spending in isolation, expenditures for new housing construction rose a solid 3.1% in December.
False Positives in Latest UI Claims Data, Which Remain Challenged: Last week, the headline number of regular, new unemployment claims was essentially cut in half in California—falling from roughly 117,000 the previous week to just 58,226 last week. However, a significant portion of this decline is associated with a backlog in processing at the State’s Employment Development Department. Initial claims are likely to surge in coming weeks before settling down at their actual levels as we have seen Pandemic Unemployment Claims do in recent weeks as the state begins to process claims again. As that happens, we expect unemployment claims to remain elevated at or above the levels we began the year at.