Gerrett Snedaker: Wine Country Real Estate Trends in July 2021

Wine Country Real Estate

Trends in July 2021

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GERRETT SNEDAKER, CRB

YEAR 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

GARRETT to be skewed by these market SNEDAKER aberrations created last year. The closings of this year are more “normalized” than the closings of July 2020 so it will look like a “slow down” in an otherwise healthy market.

NORTH BAY REAL ESTATE TRENDS FOR JULY 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 2,007 homes and condominiums for sale at the end of July. Inventory is 21% below that of a year ago (2,541) and it is 7% ahead of the inventory last month (1,871). At times, the inventory has exceeded 10,000 homes in the BAREIS region. There were 1,794 sales for the month of July. This number is 11% below a year ago (2,013) and 5% below the pace of last month (1,882).

Prices normally peak in July and stay level through January. National forecasts predict increasing inventory and a slowing of price appreciation in the coming months and into 2022. We’ll see if this happens in Wine Country.

I have been following a data point I call the “Price Reduction Ratio” for the past six months, or so. Across the country, one might expect that 20 to 25% of the homes put into the MLS will have a price reduction before they eventually sell. For July 2021, of all closed homes in our Wine Country markets, the range was from 16% (Sonoma County) to 21% (Napa County). Conversely, the ratio of homes selling in excess of Original List Price ranged from 60% (Sonoma County) to 45% (Mendocino County). It was 52% in Napa County. The average Price Reduction Ratio for all areas has gone from 29% in September 2020 to 19% in July of 2021 while the sales of homes in excess of Original List Price went from 33% to 52% over the same period.

NAPA COUNTY

The inventory of homes and condominiums available for sale in Napa County at the end of July (267) is 24% below the inventory in July 2020 (351) and it is 5% ahead of the inventory last month (255). Sixty-four percent of the inventory in Napa County (171 properties) is priced at $1,000,000 or above. New sales (150) are 14% below the pace of last year (175) and are 4% below the 156 sales last month. There is a 1.8 months supply of inventory based on the current sales pace. The Days on Market for homes closing in Napa County is currently 55 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 126 homes closed in July in Napa County ($883,000) is 16% ahead of the median price of a year ago ($760,000). 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 $3.750,000 in Napa County at this time. There has been an increase of 100% for the number of closings (68) of Luxury Homes (sales price in excess of $3,750,000) in Napa County for the period 8/1/20 to 7/31/21 compared to 34 closings in the period 8/1/19 to 7/31/20. There are 68 luxury homes in inventory at the end of July 2021 compared to 78 homes in inventory at the end of July 2020. There were 7 new Luxury Home sales in July compared to 11 last year and 6 last month. This results in a 9.7 months supply of available Luxury Homes based on the current sales

pace compared to a 1.8 months supply for the County as a whole. Days on market for the 6 luxury homes closings in July was 177 days. Over the past four months, Napa County Luxury Homes are selling at roughly 89% of original list price.

NAPA

Forty-eight percent of the inventory in Napa County is in the City of Napa. There are 128 available homes and condominiums in inventory at the end of July in the City of Napa. This is 31% below the supply at the end of July 2020 (186) and it is 3% above the inventory at the end of last month (124). New sales (99) were 15% below the pace of July 2020 (116) and they were 21% below the pace of last month (125). There is a 1.3 months supply of inventory based on the current sales pace. The Days on Market for the 103 closings last month was 48 days. The median price of the homes that closed in the City of Napa in July was $841,000. This is 16% ahead of the median price of the homes closed in July 2020 ($725,000).

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 (109) is 22% below the level of 139 in July 2020 and it is equal to the inventory last month (110). There were 29 new sales this month compared to 34 a year ago and 17 last month. There is now a 3.8 months supply of inventory based on the current sales pace. The Days on Market for the 15 closings last month was 108 days. Approximately 62% of the Luxury Market inventory (price in excess of $3,750,000) in Napa County is in the Up Valley Market (42 homes). There were three luxury home (price in excess of $3,750,000) closings in the Up Valley Market last month and there were five new luxury home sales. That makes a 8.4 month supply of inventory based on the current sales pace.

In Angwin in July, inventory was 20 homes compared to 11 a year ago and 18 last month. There were 4 new sales in Angwin for the month equal to 4 a year ago and down from 5 last month.

For additional information contact Gerrett Snedaker at 707-939-2009 or gsned@winecountrygroup.com