Wine Country and Northbay Real Estate Trends 

Company Transition

Reserve Properties is a trusted full-service boutique real estate brokerage providing personal and high-level service to our clients throughout the Northern California Wine Country area.  Besides our residential clients, we serve our investor clients through Better Invested Property Management and Reserve Property Management, our commercial clients through Mason McDuffie Commercial Real Estate and Orion Partners, Ltd., and our wine industry clients through Michael Crain Properties.  Please contact me if you have any questions and if we can be of service. 

Real Estate Industry Changes – August 2024

As a result of numerous class-action lawsuits, settlements and Department of Justice reviews, the real estate industry throughout the country is adopting numerous changes in procedures and forms beginning this month.   Every buyer and seller of residential real property will be affected by these changes.  Changers in our area were adopted on August 12, 2024.  Some of the most significant changes include:

For Buyers:

1.  When buyers begin working with a real estate agent, they will receive an advisory that outlines how brokers and agents can be compensated in a real estate transaction (Broker Compensation Advisory).
2. Every buyer will be required to have a “Buyer Representative Agreement” (BRA) with their real estate agent/broker prior to viewing available properties with that agent/broker.  The BRA forms will vary depending on the type of showing (Open House, limited # of properties, exclusive or non-exclusive, geographical limitations, etc.).  The forms will call for the buyer to compensate the real estate agent/broker with whom they decide to work subject to the ability to negotiate with the seller for the seller to pay the amount the buyer agrees to pay their agent/broker.
3. Compensation to an agent/broker representing a buyer will not be allowed to exceed the amount agreed upon in the BRA executed between the buyer and agent/broker even if the seller has expressed a willingness to pay more.

For Sellers:

1.  Potential sellers will receive an advisory when they agree to work with a real estate agent that outlines how brokers and agents can be compensated in a real estate transaction (Broker Compensation Advisory).
2. Listing agreements will no longer contain a reference to an amount being offered to a buyer’s agent/broker by the seller or a reference to the MLS (Multiple Listing Service).  The amount a seller might pay a buyer’s agent/broker will be negotiable depending on the offer received from a buyer.  There will be a separate Addendum to the listing agreement that contains MLS information.  
3. Sellers may indicate through the MLS that they will consider “concessions” as part of a sale.  These “concessions” may include credits to the buyer for closing costs, various property improvements and/or the fee, or a portion thereof, due a buyer’s agent/broker.   Listing agents may inform other agents and the public of the seller’s willingness to consider these concessions.  They many not reference a willingness to consider paying buyer agent/broker compensation in the MLS.
4. With the seller’s advance approval, the seller’s agent/broker may offer a portion of their compensation to the buyer and/or buyer’s agent/broker as part of the transaction negotiations.
5. A seller may offer their agent/broker additional compensation in the event their agent/broker (with seller’s full approval) represents a buyer of the property who is unrepresented.   

Like the changes and new procedures that the industry adopted during the COVID years, and during other industry transition periods, agents, brokers and their clients will adapt quickly to these new procedures and forms.   Agents and brokers will get on with the business of assisting our clients with transitions in their lives that involve where and how they live and work.

National Trends

As of this week, mortgage interest rates are as low as they have been all year.  The reduced interest rates have not produced an immediate increase in new sales.  Some experts believe that it takes weeks or up six to twelve months for the public to react to a lower rate environment.  This is unlike a rising rate market where buyers react immediately.  Unsold inventory growth is slowing and stands at 41% greater than a year ago.  It is expected to finish the year in the range of 20% above the inventory at the end of 2023.  A growing number of states (7-9) have higher inventory than they did in this same timeframe in 2019 before the pandemic.  New sales are trending down and mirror 2023 levels.  The growth in home prices is decelerating slightly.  It remains in the 3% range on a year over year basis.  It is expected to end the year in the 0 to 3% range.  There were more price reductions prior to sale in recent weeks than in the same period last year.  The national Price Reduction Ratio now stands near 40%.  With increased demand, and seasonal trends, this ratio will fall.  The Bay Area is a tighter market than most of the country and Price Reduction Ratios are a bit lower here.  

North Bay Real Estate Trends for July 2024

For all the areas covered by our Multiple Listing Service (BAREIS), which includes Marin, Mendocino, Napa, Solano and Sonoma Counties, there is an inventory of 3,140 homes and condominiums for sale at the end of July.  Inventory is up 34% from a year ago (2,341) and it is slightly above the inventory last month (3,126).  Inventory growth is slowing as is typical in the summer holiday season.  There were 1,211 new sales for the month of July.  This number is 16% above a year ago (1,044) and it is 9% above the pace of last month (1,113).  The median price of homes sold across our North Bay region in July was $750,000 which is equal to the $750,000 last July.

The “Price Reduction Ratio” (PRR) is considered a leading indicator of future prices for sales and closings.  Across the country in July, approximately 38% of the homes have a price reduction prior to their selling date.  The higher the ratio, the more likely price appreciation will be less in the coming months.  In normal years, this ratio is in the 30% to 35% range with the higher part of the range being in the Fall months.  For July 2024, of all closed homes in our Wine Country markets, our ratios are generally below the national figures.  In the region combined, 35% of the homes sold in July had a price reduction prior to selling.  This compares to 31% last month and 27% a year ago.  The numbers were 35% for Napa County, 32% for Sonoma County and 39% for Mendocino County.  Conversely, the ratio of homes selling for more than the original asking price was 25% across the region.  This compares to 27% last month and 37% a year ago.  The numbers were 21% in Napa County, 37% in Sonoma County and 16% in Mendocino County.  Thirty-five percent of the homes in the region had a price reduction prior to selling while 60% had a lower selling price than the original list price upon closing.  

Sonoma County:  The inventory of homes and condominiums available in Sonoma County at the end of July stands at 972 homes.  This is 39% above the inventory in July 2023 (701) and it is 1% below the inventory last month (981).  The rate of the rise in inventory has tapered off as it typically does in the summer months.  Fifty percent of the available homes for sale in Sonoma County (490) currently are priced at $1,000,000 or more.  New sales (419) in Sonoma County in July were 12% above the pace of July 2023 (373) and they were 6% above the pace last month (397).  There is a 2.3-month supply of inventory based on the current sales pace.  The time it takes to sell a home in Sonoma County is 45 days.  For 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 397 homes closed in July in Sonoma County was $835,000. This is 2% above the median price in July 2023 ($820,000).  The annualized average price ($1,010,374) of all homes sold in the County increased 2% in the past twelve months.  Over the past four months, Sonoma County homes are selling at 98% of their original list price.  In July, 37% of the homes in Sonoma County sold at a price more than the original asking price and 32% of the homes had a reduction in price before they sold.  Fifty percent of the homes closed last month had a lower selling price than the original list price.

Sonoma County Luxury Homes:  About one quarter of the inventory in Sonoma County can be characterized as Luxury Homes (listing price more than $2,200,000).  There has been a slight decrease in the number of Luxury Homes closed (187) from 8/1/23 to 7/31/24 compared to 190 closings in the period 8/1/22 to 7/31/23.  The inventory of luxury homes (243) is 38% above the inventory in July 2023 (176 homes) and it is 2% below the inventory last month (249).  The pace of new sales (19) in July is 17% below last year’s pace (23) and it is 10% below the sales pace last month (21).  The Days on Market for 12 Luxury Home closings was 83 days this July.  The Days on Market for all closed properties in the County in July was 46 days.  There is a 13-month supply of inventory of luxury properties based on the current sales pace compared to a 2.3-month supply in the overall Sonoma County market.  Over the past four months, Sonoma County Luxury Homes are selling at roughly 94% of original list price.  

Healdsburg Trends:  There are 97 homes and condominiums available for sale in Healdsburg at the end of the month.  This is 24% above the inventory in July 2023 (78) and it is equal to the inventory last month (97).  New sales in July (14) were slightly below the pace of sales in July 2023 (15) and they were 17% above the pace of sales last month (12).  There are 7-months of available inventory based on the current sales pace.  The Days on Market for the 11 homes that closed in July is 77 days.  

Oakmont:  There are 28 homes and condominiums available in Oakmont at the end of July.  This is 155% above the inventory in July 2023 (11) and it is slightly above the inventory of last month (27).  New sales (24) were 41% above the sales pace of a year ago (17) and they were 140% above the pace of last month (10).  There is a 1.2-month supply of inventory based on the current sales pace.  The median price of the homes sold in Oakmont in the past year has ranged from the low $600,000’s up to $832,000.  The median price was $853,000 for the 14 homes that closed in July.  The Days on Market for the homes that closed in July is 28 days.  Oakmont seems to be a strong market area right now.

Petaluma:   The inventory of homes and condominiums for sale in Petaluma at the end of July (90) is 32% above the inventory in July 2023 (68) and it is equal to the inventory last month (90).  There were 57 new sales for the month.  This is 59% above the sales in July 2023 (36) and it is 10% above the sales pace last month (52).  The Petaluma market currently has 1.6 months of available inventory based on the current sales pace. The median price of the 51 homes that closed in July was $960,000.  This is 2% above the median price last July ($943,000).  The Days on Market for the homes that closed in July is 31 days.

Rohnert Park:  The inventory of homes and condominiums for sale in Rohnert Park at the end of July (56) is 75% above the inventory in July 2023 (32) and it is equal to the inventory last month (56).  There were 35 new sales in Rohnert Park in July.  This sales pace is 9% above the 32 sales in July 2023 and it is also 9% above the sales last month (32).  There is a 1.6-month supply of inventory based on the current sales pace.  The median price ($745,000) of the 33 homes and condominiums that closed in July is 1.4% below the median price in July a year ago ($755,000).  Days on Market for the homes that closed in July is 48 days.

Russian River:  The inventory of homes and condominiums for sale at the end of July in the Russian River area (Guerneville, Monte Rio and Rio Nido) (93) is 58% above the level of July 2023 (59) and it is also 12% above the inventory last month (83).  There were 38 new sales for the month of July.  This is 73% above the pace in July 2023 (22) and it is 23% ahead of the pace last month (31).  There is a 3-month supply of inventory in the Russian River based on the current sales pace.  The median price in the Russian River has ranged from about $500,000 to $725,000 over the past year.  The median was $585,000 for the 30 homes that closed in July.  The homes that closed in the Russian River in July went from listing to pending in 53 days.

Santa Rosa:  Thirty-four percent of the available inventory in Sonoma County is in the City of Santa Rosa.  The inventory of homes and condominiums for sale in the City of Santa Rosa at the end of July (326) is 53% above the inventory of a year ago (213) and it is slightly above the inventory last month (322).  New sales in July (162) are 4% above the pace of last July (156) and they are 10% above the 147 sales last month.  There is 2-month supply of available homes in Santa Rosa based on the current sales pace. The median price of the 156 homes closed in July in Santa Rosa was $785,000 which is 3% above the $760,000 price a year ago.  The Days on Market for the homes that closed in July is 38 days. 

Sebastopol Trends:  The inventory of homes and condominiums for sale at the end of March in Sebastopol is 37 homes.  This is 16% below the inventory last March (44) and it is 12% below the inventory last month (42).  There were 23 new sales for the month of March. This is 5% above the pace in March 2023 (22) and it is 12% below the pace last month (26).  There is a 1.6-month supply of inventory in Sebastopol based on the current sales pace.  The 26 homes that closed in Sebastopol in March went from listing to pending in 56 days. 

Sonoma Valley:  The number of available homes and condominiums for sale (151) at the end of July in the Sonoma Valley (Sonoma, Glen Ellen and Kenwood) is 30% above the inventory last July (116) and it is 8% below the inventory of last month (164).  There were 40 new sales for the month. This is 8% above the 37 sales in July 2023 and it is 11% below the 45 sales last month.  There is a 3.8-month supply of inventory in Sonoma based on the current pace of sales.  The average Days on Market for the 40 properties that closed in the Sonoma Valley in July is 70 days.  The closings in the month had a selling price equal to 94% of the original listing price.  The annualized average price ($1,546,721) of all homes sold in the Sonoma Valley increased 4.5% in the past twelve months.  In July, 41% of the homes in the Sonoma Valley sold at a price more than the original list price and 26% had a reduction in price before they sold.  Forty-seven percent of the homes in the Valley had a lower selling price than the original list price.

The high-end quartile (top 25%) of inventory in the Sonoma Valley at the end of July starts at $3,400,000.  Twenty-five homes closed in the top quartile in the past twelve months compared to 26 in the twelve months prior to that.  In July, there were 2 closings and 4 new sales in this quartile comparing to 7 closings and 3 new sales a year ago and 3 closings and 4 new sales last month. There are 38 homes available in this quartile in July 2024 compared to 28 a year ago and 43 last month.  

Mobile Homes in Sonoma County:  The inventory of available mobile homes for sale in Sonoma County at the end of July is 80 homes.  This is 29% above the 62 mobile homes available in July 2023 and it is 9% above the number of available mobile homes last month (74).  There were 39 new mobile home sales in July.  This is 8% above the pace of sales in July 2023 (36) and it is 11% the pace of sales last month (35).  There is a 2.1-month supply of inventory based on the current sales pace.  The average days on market of the 28 mobile homes closed in July is 80 days and the median price was $178,000 compared to $155,000 a year ago and $193,000 last month.  

Lots for Sale and Sold in Sonoma County:  The inventory of available lots for sale in Sonoma County at the end of July is 339 properties. The current inventory is essentially equal to the number of lots in July 2023 (340) and it is 4% below the number of available lots last month (352). There were 30 new lot sales in July.  This is 77% ahead of the pace of sales in July 2023 (17) and it is 25% ahead of the pace of lot sales last month (24).  There is a 11-month supply of inventory based on the current sales pace.  The average days on market of the 23 lots closed in July is 131 days and the median price is $190,000 compared to $298,000 a year ago and $388,000 last month.   

Napa County:  The inventory of homes and condominiums available for sale in Napa County at the end of July (403) is 39% above the inventory in July 2022 (291) and it is 7% above the inventory last month (376).  New sales (100) are 10% above the pace of last year (91) and are 37% above the sales last month (73).  There is a 4-month supply of inventory based on the current sales pace.  The Days on Market for the homes closing in Napa County is currently 59 days.  In 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 77 homes closed in July in Napa County ($1,035,000) is 20% above the median price of a year ago ($864,000).  It is the highest median price since last August.  The annualized average price ($1,254,922) of all homes sold in the County decreased 1.4% in the past twelve months.  Over the past four months, Napa County homes are selling at roughly 95% of original list price.  In July, 21% of the homes in Napa County sold at a price that was more than the original asking price and 35% of sold homes had a price reduction prior to sale.  Sixty-four percent of the homes sold at a price that was less than the original asking price.  

Napa County Luxury Homes:  If one takes the highest quartile (25%) of available inventory as the “Luxury Market”, the Luxury Market currently begins at $3,000,000 in Napa County (down from $3,500,000 last month).  There has been a increase of 6% for the number of closings (53) of Luxury Homes (sales price more than $3,500,000) in Napa County for the period 8/1/23 to 7/31/24 compared to 50 closings in the period 8/1/22 to 7/31/23.  There are 101 luxury homes in inventory at the end of July 2024 compared to 89 homes in inventory at the end of July 2023 and 108 last month. There were 6 new Luxury Home sales in July compared to 3 last year and 6 last month.  This creates a 17-month supply of inventory.  Over the past four months, Napa County Luxury Homes are selling at roughly 95% of original asking price and the 4 homes that closed last month were on the market for 33 days.

Napa:  Fifty-eight percent of the inventory in Napa County is in the City of Napa.  There are 234 available homes and condominiums in inventory at the end of July in the City of Napa. This is 73% above the supply at the end of July 2023 (135) and it is 6% above the inventory at the end of last month (221).  New sales (70) were 15% above the pace of July 2023 (61) and they were 32% ahead of the pace of last month (32).  There is a 3.3-month supply of inventory based on the current sales pace.  The Days on Market for the 55 closings last month is 43 days.  The median price of the homes that closed in the City of Napa in July was $1,048,000. This is the highest median price since last August.  It is 23% above the median price of the homes closed in July 2023 ($865,000).  

Up Valley Napa County:  The inventory of homes and condominiums for sale in the Up Valley Napa County market (Angwin, Calistoga, Deer Park, Oakville, Rutherford, St. Helena and Yountville) at the end of July (141) is 22% above the level of 116 in July 2023 and it is 9% above the inventory last month (130).  There were 18 new sales this month compared to 16 a year ago and 16 last month.  There is now a 7.8-month supply of inventory based on the current sales pace. The Days on Market for the 13 closings last month is 68 days.  Over the past four months, Up Valley homes are selling at roughly 92% of original list price.  Forty-four percent of the Luxury Market inventory (price more than $3,000,000) in Napa County is in the Up Valley Market (44 homes). There were 3 luxury home (price more than $3,000,000) closings in the Up Valley Market last month and there were 3 new luxury home sales.

Angwin:  The inventory of homes and condominiums for sale in the Angwin at the end of July (22) compares to 14 in July 2023 and 21 last month.  There was 2 new sale this month compared to 2 a year ago and 1 last month.  The average asking price for the 22 homes on the market in Angwin is $2,508,000.

Mobile Homes in Napa County:  The inventory of available mobile homes for sale in Napa County at the end of July is 49 homes.  This is 53% above the number of mobile homes available in July 2023 (32) and it is 32% above the 37 available homes last month.  There were 13 new mobile home sales in July.  This compares to 8 home sales last July 2023 and 18 sales last month.  There is a 3.8-month supply of inventory based on the current sales pace.  The average days on market of the 10 mobile homes closed in July is 114 days and the median price was $287,000.  This compares to a median price of $257,000 in July 2023 and $284,000 last month.

Mendocino County:  The inventory of homes and condominiums available in Mendocino County at the end of July stands at 330.  This is 10% above the inventory in July 2023 (299) and it is essentially equal to the inventory last month (329).  New sales (76) in Mendocino County in July were 49% above the pace of July 2023 (51) and they were 46% above the pace last month (52).  There now is a 4.3-month supply of inventory in Mendocino County based on the existing sales pace.  The average Days on Market for the 61 homes sold in Mendocino County in July is 82 days.  For 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 sold homes in Mendocino has been between $400,000 and $600,000 over the past year.  The median price of the homes closed in July in was $549,000.  The annualized average price ($581,913) of all homes sold in the County decreased 2% in the past twelve months.  Over the past four months, Mendocino County homes are selling at roughly 91% of original asking price.  In July, 16% of the homes in Mendocino County sold at a price greater than the original asking price.  Thirty-nine percent of the homes showed a price reduction prior to selling and 67% of homes closed at a price less than their original list price.

Ukiah:  The inventory of homes and condominiums for sale at the end of March in Ukiah is 77 homes.  This is 35% above the level of March 2023 (57) and it is slightly below the inventory last month (78).  There were 28 new sales for the month of March.  This compares to 16 sales in March 2023 and 21 sales last month.  There are 2.8-months of inventory based on the current sales pace.  The average Days on Market for the 28 homes sold in Ukiah in March is 66 days.  The median price of the homes sold in Ukiah in the past year has ranged from $400,000 to $640,000. The median price was $556,000 for the homes that closed in March.  

Marin County:  Marin County is often considered a “feeder” county to our North Bay Wine Country markets.  Marin County’s inventory (377 homes) is 15% above the 324 homes in July 2023 and it is 13% below the 432 homes in inventory last month.  New sales (163) were 4% below the number last July (169) and they were 29% below the pace of last month (228).  There is a 2.3-month supply of inventory at the end of July 2024.  The median price of the 210 homes sold in Marin County in July is $1,413,000.  This is 3% below the median price a year ago ($1,459,000).  Homes sold in an average of 36 days and at 96% of original asking price.