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Raging Seller’s Market in Sonoma County?

Sonoma Count, California–We are edging dramatically into a “Seller’s Market” after 5+ years
of a raging “Buyer’s Market”. What is driving this transition in favor of
Sellers?  Increased optimism about the economy with increased employment
opportunities, life-time LOW interest rates plus scarcity of homes. 

The above graph indicates the “scarcity” of homes as the “Month’s Supply” of inventory has shrunk dramatically from 4.4 months supply last year at this time to a paltry 1.6 months in February. Under 4 months supply of inventory is considered a “Seller’s Market”–under 2 months you have a very HOT Seller’s market.

 The proof is in the amount of business being written by Realtors. Here in Sonoma
County the “Under Contracts” category, or those properties placed into escrow,
is up 73% over the past 2 years.  The  “Months’ Supply” of homes has
dropped from 4.4 months a year ago down to a paltry 1.6 months’ supply
currently. A sub-4 months’ supply of inventory is considered a “Seller’s
Market” according to the California Association of Realtors Chief economist,
Leslie Appleton-Young.   Will new homes hit the market soon? We have
24% LESS homes coming to the market over last year. This is a formulae for
increased price appreciation as scarcity of ANY product coupled with huge
demand will INCREASE the value of that product. When multiple offers are coming
in on homes and overbidding is present as it is, the natural inclination is for
property pricing to rise.  Realtors for years have always had two
conversations with Appraisers who ultimately verify or deny our home prices.
When the market is going down we always tell the appraiser don’t look at the
pricing of homes in ESCROW-look at the closed comps! When the market is going
up, as in THIS market, we ask the appraiser to NOT look at the closed comps but
look at the homes IN ESCROW! But the big question is will the BANKS allow the
appraisers to do this. With increased regulations in lending this might be the
big question of this surging marketplace. But for now we have super low rates,
scarcity of homes and huge demand. If you are thinking of SELLING I’d do it NOW
and NOT wait for those placing their homes onto the market in May, June or
July. Take advantage of the lack of COMPETITION and place your home on the
market today.

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