“In real estate, you make 10% of your money because you’re a genius and 90% because you catch a great wave.” – Jeff Greene
The end of the summer season is bringing some sunnier news on mortgage rates. Last month, we were hoping to see rates on the 30-year mortgage dip below 6.5% this month, but we got something even better. The 30-year mortgage rate has fallen again, now reaching a 19-month low at 6.05%. In some areas across the country (California, Florida, New Jersey, New York, and Utah), it’s dropped to right at or slightly below the 6% mark. That’s a full percentage point below July 2024 and nearly two percentage points below last year’s peak in October 2023. All eyes are on the Fed’s upcoming meeting, where many economists anticipate a rate cut. This could relieve many buyers on the sidelines (sellers, too) by giving them more buying power. However, it could also create more competition in the typically robust fall market.
Compared to the same period last year, the Sonoma County median sales price for single-family homes decreased 3.6% to $819K; condos/townhomes decreased 4.5% to $425K. Average days on market was still quite low at 49 days for single-family homes and 52 days for condos/townhomes. The number of residential properties sold was 386, moderately up compared to the same period last year.
The number of single family homes for sale has increased over this time last year, while the number of homes sold is about the same as last year. As a result, we are seeing more homes “sit” — especially if they need some work, are in a less popular neighborhood, or are priced too high.
“Months Supply of Inventory” is a helpful stat to measure imbalance in the market. Take the number of sales over the past 3 months, and divide it by 3 to get the pace of monthly sales. Divide that number into the number of available homes on the market, and you have the “Months Supply of Inventory”. Doctors differ, but the general theory is that 3-4 months’ supply is a balanced market, while less than 3 is a sellers’ market and more than 4 is a buyers’ market. We are currently moving towards a balanced market here in Sonoma County.
Days on Market measures how many days pass between a property hitting the market and when it goes “pending” or when the buyer removes their final contingency. That is when a property is technically “sold” — even though it may take another week or two, or more, for escrow to close. Days on Market is slightly up from last year. Homes are taking about 50 days to go “pending”, which means on average properties are taking 3-4 weeks to go into contract. Some properties are still going into contract in the first 1-2 weeks, and some are taking much longer.
The percentage of Sold to Original price is holding at 97%, which was the same this time last year. Over the last 12 months, the lowest was 93% in January of this year. We saw the percentage reach 99% just a few months ago in March and April of this year, which reflects the busy Spring buying season. We are currently heading lower as we enter the Fall months and head towards the holidays when transactions tend to slow. A great opportunity for buyers!
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People move for all kinds of reasons: upsizing, downsizing, new job, etc. Moves happen not because the price is right, or the market is right, but because the time is right on a personal level. As a real estate agent, I may not have a magic wand to make the perfect home appear or to lower rates, but I can help you find the best opportunity in any market. Let’s talk about how I can make the most of it for you.
