Wine Country Real Estate Trends in September 2021
Gerrett Snedaker, CRB
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EAR OVER YEAR COMPARISONS 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 GERRETT closings of this year are more SNEDAKER “normalized” than the closings of September 2020 so it will look like a “slow down” in an otherwise healthy market. NORTH BAY AND NAPA REAL ESTATE TRENDS FOR SEPTEMBER 2021 For all of the areas covered by our Multiple Listing Service (BAREIS), which includes Lake, Marin, Mendocino, Napa, Solano and Sonoma Counties, there is an inventory of 2,074 homes and condominiums for sale at the end of September. Inventory is 11% below that of a year ago (2,336) and it is slightly ahead of the inventory last month (2,064). At times, the inventory has exceeded 10,000 homes in the BAREIS region. There were 1,691 sales for the month of September. This number is 3% below a year ago (1.737) and slightly ahead of the pace of last month (1,680). Prices normally peak in September and stay level through January. National forecasts
36 | DISTINCTIVE PROPERTIES
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% of the homes put into the MLS will have a price reduction before they eventually sell. Currently, for the entire country, the ratio is 29% up from a low of 15% in April of this year. For September 2021, of all closed homes in our Wine Country markets, the range was from 15% (Napa County) to 18% (Mendocino and Sonoma Counties). Conversely, the ratio of homes selling in excess of Original List Price (OLP) ranged from 53% (Sonoma County) to 33% (Mendocino County). It was 44% in Napa County. The average Price Reduction Ratio for all areas has gone from 29% in September 2020 to 17% in September of 2021 while the sales of homes in excess of Original List Price went from 33% to 43% over the same period. In our Wine Country market, the low PRR was 14% in May and the high OLP ratio was 55% in May. NAPA COUNTY The inventory of homes and condominiums available for sale in Napa County at the end of September (269) is 13% below the inventory in September 2020 (309) and it is 5% ahead of the inventory last month (257). Sixty-seven percent of the inventory in Napa County (179 properties) is priced at $1,000,000 or above.
Dreamstime
New sales (123) are 16% below the pace of last year (146) and are 7% below the 132 sales last month. There is a 2.2 months supply of inventory based on the current sales pace. The Days on Market for homes closing in Napa County is currently 53 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 119 homes closed in September in Napa County ($850,000) is 5% ahead of the median price of a year ago ($810,000). Over the past four months, Napa County homes are selling at roughly 96% of original list price. NAPA COUNTY LUXURY HOMES If one takes the highest quartile (25%) of available inventory as the “Luxury Market”, the Luxury Market begins at $4,000,000 in Napa County at this time. There has been an increase of 48% for the number of closings (59) of Luxury Homes (sales price in excess of $4,000,000) in Napa County for the period 10/1/20 to 9/30/21 compared to 40 closings in the period 10/1/19 to 9/30/20. There are 65 luxury homes in inventory at the end of September 2021 compared to 63 homes in inventory at the end of September 2020 and 64 last month. There were 2 new Luxury Home sales in September compared to 9 last year and 8 last month. This results in a 33 months supply of Please see Trends, Page 38 October 2021
