Gerrett Snedaker: Wine Country Real Estate Trends in October 2021

Wine Country Real Estate Trends in October 2021

Dreamstime

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 to be skewed by these market aberrations created last year. The closings

GERRETT of this year are more “norSNEDAKER malized” than the closings of October 2020 so it may look like a “slow down” in an otherwise healthy market.

NORTH BAY REAL ESTATE TRENDS FOR OCTOBER 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 1,949 homes and condominiums for sale at the end of October. Inventory is 20% below that of a year ago (2,440) and it is 6% below the inventory last month (2,074). At times, the inventory has exceeded 10,000 homes in the BAREIS region. There were 1,571 sales for the month of October. This number is 8% below a year ago (1.707) and 3% below the pace of last month (1,621).

Prices normally peak in October 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 10% 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 29% up from a low of 15% in April of this year. For October 2021, of all closed homes in our Wine Country markets, the range was from 20% (Sonoma County) to 24% (Napa County). The ratio was 22% in Mendocino County. Conversely, the ratio of homes selling in excess of Original List Price (OLP) ranged from 54% (Sonoma County) to 27% (Mendocino County). It was 44% in Napa County. The average Price Reduction Ratio for all areas has gone a low of 14% in May of this year to 22% where it stands now. The Over List Price has dropped from 55% in May to the current level of 42%. 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 October (239) is 22% below the inventory in October 2020 (305) and it is 11% below the inventory last month (269). Sixty-eight percent of the inventory in Napa County (163 properties) is priced at $1,000,000 or above. New sales (136) are 8% above the pace of last year (125) and are 13% above the 120 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 118 homes closed in October in Napa County ($810,000) is 13% ahead of the median price of a year ago ($715,000). Over the past four months, Napa County homes are selling at roughly 95% 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 50% for the number of closings (63) of Luxury Homes (sales price in excess of $3,750,000) in Napa County for the period 11/1/20 to 10/31/21 compared to 42 closings in the period 11/1/19 to 10/31/20. There are 63 luxury homes in inventory at the end of October 2021 compared to 69 homes in inventory at the end of October 2020 and 70 last month. There were 9 new Luxury Home sales in October compared to 5 last year and 3 last month. This results in a 4.8 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. Over the past four months, Napa County Luxury Homes are selling at roughly 89% of original list price.

AMERICAN CANYON

There are 14 available homes and condominiums in inventory at the end of October in American Canyon. This is 40% above the inventory a year ago (10) and it is equal to the supply last month (14). There were 12 new sales in the month. This is 14% below the pace of last year (14) and it is slightly above the 11 sales last month. There is a 1.2 months supply of inventory based on the current sales pace. The Days on Market for 12 homes that closed in American Canyon last month was 30 days. The median price of the homes that closed in American Canyon in October ($563,000) was 7% below the median price of a year ago ($610,000). Last month the median price of the sold homes was $775,000. The average price per square foot of the homes sold in American Canyon was at $406 last month, This is above the $275 to $350 range where the sales have been over the past several years.

NAPA

Forty-nine percent of the inventory in Napa County is in the City of Napa. There are 118 available homes and condominiums in inventory at the end of October in the City of Napa. This is 33% below the supply at the end of October 2020 (175) and it is 11% below the inventory at the end of last month (132). New sales (97) were 16% ahead of the pace of October 2020 (84) and they were 21% ahead of the pace of last month (80). There is a 1.2 months supply of inventory based on the current sales pace. The Days on Market for the 82 closings last month was 40 days. The median price of the homes that closed in the City of Napa in October was $815,000. This is 17% higher than the median price of the homes closed in October 2020 ($699,000).

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 October (92) is 14% below the level of 107 in October 2020 and it is 13% below the inventory last month (106). There were 22 new sales this month compared to 20 a year ago and 25 last month. There is now a 4.2 months supply of inventory based on the current sales pace. The Days on Market for the 20 closings last month was 130 days. Approximately 59% of the Luxury Market inventory (price in excess of $3,750,000) in Napa County is in the Up Valley Market (37 homes). There were 2 luxury home (price in excess of $3,750,000) closings in the Up Valley Market last month and there were 8 new luxury home sales. This makes for a 4.2 month supply of inventory based upon the current sales pace.

In Angwin in October, inventory was 11 homes compared to 10 a year ago and 12 last month. There were 2 new sales in Angwin for the month compared to 2 a year ago and 6 last month. The median price of the active listings in Angwin as of October 2021 is $1,685,000.

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