Gerrett Snedaker: Wine Country Real Estate Trends in November 2021

Wine Country real estate trends in November 2021

Gerrett Snedaker, CRB

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YEAR OVER YEAR

COMPARISONS

In mid-March 2020, the COVID19 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 accelGERRETT SNEDAKER erated rapidly in May through November. Year over year statistical comparisons are therefore going to be skewed by these market aberrations created last year. The closings of this year are more “normalized” than the closings of November 2020 so it may look like a “slow down” in an otherwise healthy market.

WINE COUNTRY REAL ESTATE TRENDS IN NOVEMBER 2021

For all of the areas covered by our Multiple Listing Service (BAREIS), which includes Marin, Mendocino, Napa, Solano and Sonoma Counties, there is an inventory of 1,479 homes and condominiums for sale at the end of November. Inventory is 32% below that of a year ago (2,165) and it is 24% below the inventory last month (1,949). At times, the inventory has exceeded 10,000 homes in the BAREIS region. There were 1,395 sales for the month of November. This number is 2% above a year ago (1.367) and 8% below the pace of last month (1,512).</span>

Prices normally peak in November and stay level through January. National forecasts 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. The median price for all homes closed in the BAREIS region was 13% higher than a year ago.

I have been following a data point I call the “Price Reduction Ratio” (PRR) for the past year, or so. Across the country, on average, 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 27% up from a low of 15% in April of this year. For November 2021, of all closed homes in our Wine Country markets, the range was from 27% (Sonoma and Mendocino Counties) to 32% (Napa County). Conversely, the ratio of homes selling in excess of Original List Price (OLP) ranged from 48% (Sonoma County) to 43% (Mendocino County). It was 45% in Napa County. The average Price Reduction Ratio for all areas has gone a low of 14% in May of this year to 29% where it stands now. The Over List Price has dropped from 55% in May to the current level of 45%. These are signs of a cooling market after the heated COVID run-up of last year.

NAPA COUNTY

The inventory of homes and condominiums available for sale in Napa County at the end of November (180) is 38% below the inventory in November 2020 (290) and it is 25% below the inventory last month (239). Seventy percent of the inventory in Napa County (126 properties) is priced at $1,000,000 or above. New sales (108) are 4% below the pace of last year (113) and are 18% below the 131 sales last month. There is a 1.7 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

TRENDS

From 18

pending. The median price of the 114 homes closed in November in Napa County ($765,000) is 3% below the median price of a year ago ($790,000). 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. This is the highest median price for this quartile that we have ever recorded. There has been an increase of 28% for the number of closings (55) of Luxury Homes (sales price in excess of $4,000,000) in Napa County for the period 12/1/20 to 11/30/21 compared to 43 closings in the period 12/1/19 to 11/30/20. There are 47 luxury homes in inventory at the end of November 2021 compared to 60 homes in inventory at the end of November 2020 and 57 last month. There were 3 new Luxury Home sales in November compared to 4 last year and 10 last month. This results in a 16 months supply of available Luxury Homes based on the current sales pace compared to a 1.7 months supply for the County as a whole. Over the past four months, Napa County Luxury Homes are selling at roughly 88% of original list price.

NAPA

Forty-seven percent of the inventory in Napa County is in the City of Napa. There are 84 available homes and condominiums in inventory at the end of November in the City of Napa. This is 49% below the supply at the end of November 2020 (165) and it is 29% below the inventory at the end of last month (118). New sales (75) were 12% below the pace of November 2020 (85) and they were 19% below the pace of last month (93). There is a 1.1 months supply of inventory based on the current sales pace. The Days on Market for the 84 closings last month was 49 days. The median price of the homes that closed in the City of Napa in November was $758,000. This is slightly higher than the median price of the homes closed in November 2020 ($750,000).

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 November (76) is 26% below the level of 103 in November 2020 and it is 17% below the inventory last month (92). There were 17 new sales this month compared to 11 a year ago and 23 last month. There is now a 4.5 months supply of inventory based on the current sales pace. The Days on Market for the 19 closings last month was 69 days. Approximately 57% of the Luxury Market inventory (price in excess of $4,000,000) in Napa County is in the Up Valley Market (27 homes). There were 2 luxury home (price in excess of $4,000,000) closings in the Up Valley Market last month and there were 2 new luxury home sales. This makes for a 13.5 month supply of inventory based upon the current sales pace.

In Angwin in November, inventory was 8 homes compared to 10 a year ago and 11 last month. There were 2 new sales in Angwin for the month compared to none a year ago and 2 last month. The median price of the active listings in Angwin as of November 2021 is $2,842,000.

AMERICAN CANYON

There are just 6 available homes and condominiums in inventory at the end of November in American Canyon. This is equal to the inventory a year ago (6) and it is 57% below the supply last month (14). There were 13 new sales in the month. This is also equal to the pace of last year (13) and it is 30% above the 10 sales last month. There is a 0.5 months supply of inventory based on the current sales pace. The Days on Market for 9 homes that closed in American Canyon last month was 46 days. The median price of the homes that closed in American Canyon in November ($785,000) was 30% ahead of the median price of a year ago ($605,000). The median sold price has been in excess of $750,000 in several months in the past year. The average price per square foot of the homes sold in American Canyon was at $323 last month, This is in line with the $275 to $350 range where the sales have been over the past several years.

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