Since the start of 2023, single-family home inventory has followed fairly typical seasonal trends, but at significantly depressed levels. Low inventory and fewer new listings have slowed the market considerably. Typically, inventory peaks in July or August and declines through December or January, but the lack of new listings prevented meaningful inventory growth. Last year, new listings peaked in May, sales peaked in June, and inventory peaked in September. New listings have been exceptionally low, so the little inventory growth in 2023 was driven by softening demand. In January 2024, single-family home and condo inventory and sales dropped, but more new listings came to the market, which drove a higher number of sales in February. Sales continued to climb higher in March and April, along with new listings.
With the current inventory levels, the number of new listings coming to market is a significant predictor of sales. New listings rose 21% month over month, and sales followed suit, increasing 14% as well. Year over year, inventory is up 19%, and sales are up 6%. Demand is clearly high in the North Bay, but more supply is needed for a healthier market.
Months of Supply Inventory fell in April 2024, indicating a sellers’ market
Months of Supply Inventory (MSI) quantifies the supply/demand relationship by measuring how many months it would take for all current homes listed on the market to sell at the current rate of sales. The long-term average MSI is around three months in California, which indicates a balanced market. An MSI lower than three indicates that there are more buyers than sellers on the market (meaning it’s a sellers’ market), while a higher MSI indicates there are more sellers than buyers (meaning it’s a buyers’ market). MSI trended higher in the second half of 2023, hovering between a balanced market and a sellers market. In January and February 2024, the North Bay market MSI continued that trend, but in March and April, MSI fell, indicating the housing market now favors sellers. The only exceptions are single-family homes in Napa and condos in Marin and Napa, which were balanced.
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