A Berkshire Hathaway Affiliate
Buy.Sell.Stay. December 2015 Market Report Wine Country
2016 Intero Real Estate Services Inc., a Berkshire Hathaway affiliate and a wholly owned subsidiary of HomeServices of America, Inc. All rights reserved. Data provided by Trendgraphix Januray 2016.. All information deemed reliable but not guaranteed. This is not intended as a solicitation if you are listed with another broker.
Executive Insights Introducing Intero Real Estate’s December 2015 Wine Country Market Report The Bay Area tends to have, by and large, the reputation of being an expensive and even impossible place to live. The stereotype is consistent: unless you’re in the tech industry (and even if you’re in the tech industry), or very wealthy, you’re going to have a hard time living in the Bay Area. While it’s true that the tech industry is largely responsible for the Bay Area’s high cost of living, it’s not true that the Bay Area is exclusively for the wealthy. The tech industry, in fact, has provided an affluence of jobs, causing the area to exist in an excellent state of financial self-sustainment. As Intero’s CEO and President Tom Tognoli puts it, “A strong tech market that has been fueled by an accommodative money supply and historically low interest rates has made the Bay Area the envy of the world.” According to the California Association of Realtors (C.A.R.), California as a whole should see an increase in existing home sales of 6.3% in 2016, reaching up to 433,000 homes. “Solid job growth and favorable interest rates will drive a strong demand for housing next year,” said C.A.R. President Chris Kutzkey. As far as solid job growth goes, the Bay Area is the place to be, with the added bonus of income growth as well. As the area continues to be populated by more and more successful companies, in addition to expansions from our tried and true tech giants (Google, Apple, eBay, Facebook, etc.), more and more jobs are being created. As such, more and more people are looking for homes. According to REALTOR ® Mag, millennials (defined as 25-34 years old) are expected to make up 30% of the existing home market. As the Bay Area’s tech industry is largely populated by employed millennials, the area should see in a significant increase in home sales from millennials alone. Income growth and job security are probable factors in this, as well as the knowledge that owning a home is likely more financially sound than renting. In fact, we believe that 2016 will yield a significant increase in renters choosing to become homeowners. Tognoli weighs in on this as well: “Even as much as home prices have appreciated over the last several years, it’s still much cheaper to own than to rent when you take into consideration the tax write off. Even if a home did not appreciate a nickel, it’s still smarter to own than rent if you can qualify.” Now that we’ve given you some background, we’d like to give you a closer look at the most prominent trends that have defined the Sonoma housing market. The market is constantly shifting in small yet meaningful ways, and we want make sure you always have the most accurate and up to date insights possible. The following pages will utilize market data to illustrate these changes and trends; more specifically, we’ve analyzed inventory, pricing, and how long homes have been on the market. We get that data can be a lot to sift through, which is why we did it for you. Whether you want to buy, sell, or stay, reading this report will give you the knowledge to make informed decisions every step of the way.
Market Highlights Wine Country
Total Homes for Sale
46
Luxury Homes for Sale*
10
*Homes for sale above $3 million.
Total Homes Sold
Days on Market
Average List Price
Average Sold Price
9
$1,999,000
91
$975,000
Inventory Wine Country
Total Number Of Homes:
For Sale
Sold
82
89
91
29
32
18
24
20
27
41
46
50
48
55
48 33
33
41
45
30
57
54
50
59
62
60
58
68
76
70
40
89 84
85
80
93
90
87
100
10 0 14-Oct
14-Nov
14-Dec
15-Jan
15-Feb
15-Mar
15-Apr
15-May
15-Jun
15-Jul
15-Aug
15-Sep
15-Oct
15-Nov
15-Dec
Congratulations sellers! It’s a great market! Total property sales in December were slightly lower than this time last year, as well as this time the previous month. This is to be expected at this time of year, though, as people tend to be less focused on their home searches and instead busy with family, vacationing, traveling, or participating in other holiday activities. The holiday season is historically slower than the rest of the year when it comes to home sales, as families want to enjoy the holidays without being disturbed. As a result, the total number of homes available in December was very slightly down compared to last year, and down by a significant 32.4% compared to the previous month. This smaller inventory means that buyers who have been waiting to buy will have fewer homes to choose from, which is great news for sellers! When it comes to luxury real estate, however, buyers had the upper hand. December saw a 100% increase in luxury homes available compared to last year, indicating significant growth. This is a relatively high inventory, which means that luxury buyers who have been biding their time will have a larger selection of homes to choose from. This gainful time for luxury buyers may be attributed to the strengthening of the US dollar compared to other global economies, causing a decrease in, and less competition from, international buyers (which usually account for a large portion of US luxury sales). Either way, this is your time to shine, luxury buyers, so take advantage!
Inventory By The Numbers Home Price Range
Homes For Sale
Year Over Year % Difference
< $500K
6
-71%
$500K $1M
20
42.90%
$1M - $3M
10
-28.60%
$3M - $5M
7
600.00%
$5M - $10M
2
100.00%
$10M +
1
-66.70%
Pricing Wine Country
Average Prices in $,000: 2500
Sold Price
Active Price
$2,265 $2,078 $1,876
2000
$1,924
$1,978
$2,070
$2,012
$1,844
$2,059 $2,048 $1,904
$1,999
$1,962 $1,800
$1,540
1500
$1,205
1000
$764
$772
14-Oct
14-Nov
$823
$806
$769
$851
$1,076
$960
$942
15-May
15-Jun
$983
$919
$860
$975
$643
500
0 14-Dec
15-Jan
15-Feb
15-Mar
15-Apr
15-Jul
15-Aug
15-Sep
15-Oct
15-Nov
15-Dec
Good News! The average “For Sale” price increased in December to $1,889,000. This is a pretty slight increase compared to last year, and to the previous month, but it’s still good news for sellers!
Pricing By The Numbers
This increase in “For Sale” pricing doesn’t necessarily need to be foreboding for buyers. The average “Sold” price was slightly higher than last year at $1,101,000, but it was also very marginally lower than the previous month. Still, that’s a pretty significant difference between “For Sale” and “Sold” average prices, which means that there’s always room for negotiation, something both buyers and sellers should keep in mind.
Average Price Per Square Foot.
According to C.A.R. (California Association of Realtors), another positive to consider is the potential for job and income growth in the Silicon Valley area. This is good for both sellers and buyers, as more and more workers will be able to afford making the leap from renting to owning. As the area becomes more densely populated, people will be buying homes in farther surrounding areas.
$482
-1.0% Month over Month
On The Market Wine Country
Average Days On Market 90 80
80
77
77
77
67
70
64
71
67 61
60
58
53
65
59
56
46
50 40 30 20 10 0 14-Oct
14-Nov
14-Dec
15-Jan
15-Feb
15-Mar
15-Apr
15-May
15-Jun
15-Jul
15-Aug
15-Sep
15-Oct
15-Nov
15-Dec
Favorable For Sellers! The average Days on Market (DOM) shows, on average, how long properties are on the market before they sell. An upward trend (longer time on the market) indicates a move in favor of buyers, whereas a downward trend (shorter time on the market) indicates a move in favor of sellers. The DOM showed a generally upward trend for December; the average DOM was 71 days, a slight increase from the previous month, and a slight decrease than this time last year. This is a relatively long time, as far as home sales are concerned. Buyers, this is good news for you! The longer a house is on the market, the more likely it is that there will be room for negotiation, or lowered prices. Sellers should not be discouraged, though! Itâ&#x20AC;&#x2122;s quite common for a house to be on the market for at least a month, and as we mentioned earlier, the holiday season is also historically slow.
DOM By The Numbers Home Price Range
Days on Market
Year Over Year % Difference
< $500K
54
-35%
$500K $1M
73
-7%
$1M - $3M
81
2%
$3M - $5M
57
100%
$5M - $10M
0
N/A
$10M +
0
0%