The Local Lowdown: November 2024

Michelle Kim | December 1, 2024

The Local Lowdown

Quick Take:

The median single-family home prices are still near their record highs with the exception of Marin, which peaked at over $2.2 million in 2022. We expect prices to contract through January 2025.
Total inventory fell 22.9% month over month, as homes coming under contract and sales spiked in October along with fewer new listings. We expect inventory to decline and the overall market to slow for the next three months.
Months of Supply Inventory fell across the North Bay in October, implying a shift that favors sellers. MSI indicated a sellers’ market in Marin, Solano, and Sonoma and a buyers’ market in Napa.

Note: You can find the charts/graphs for the Local Lowdown at the end of this section.

The median single-family home price in Napa declined year over year across markets

Single-family home prices are near record highs across most of the North Bay, with the exception of Marin. Persistently low, but rising, inventory relative to the high demand in the area has more than offset the downward price pressure from higher mortgage rates. Prices in the North Bay generally haven’t experienced larger drops due to higher mortgage rates. Year to date, in October, the median single-family home price rose across the North Bay with the exception of Napa. Year over year, however, prices declined across markets. Prices typically peak in the summer months, and the mild contraction after the post-summer peak has fallen in line with expectations. Home prices will likely continue to decline slightly for the next three months.

High mortgage rates soften both supply and demand, but home buyers and sellers seemed to tolerate rates near 6% much more than around 7%. Mortgage rates fell significantly from May through September, but rose significantly in October. Now, rates are far closer to 7% than 6%, so we expect sales to slow starting in November.

Sales rose across the North Bay, while inventory and new listings fell

The 2024 housing market has looked progressively healthier with each passing month. We’re far enough into the year to know that inventory levels are about as good as we could’ve hoped. In 2023, single-family home inventory followed fairly typical seasonal trends, but at significantly depressed levels. Low inventory and fewer new listings slowed the market considerably last year. Even though sales volume this year was similar to last, far more new listings have come to the market, which has allowed inventory to grow. Typically, inventory begins to increase in January or February, peaking in July or August before declining once again from the summer months to the winter. It’s looking like 2024 inventory, sales, and new listings will resemble historically seasonal patterns, and at more normal levels.

In October 2024, the number of homes for sale was 11% higher than last year, which was largely caused by the number of homes coming under contract in September, up 17% month over month and 48% year over year. The North Bay housing market is notably responsive to mortgage rates, and as rates fell in September, buyers rushed to the market. Homes under contract increased even further in October, so sales will likely rise again in November.

Months of Supply Inventory in October 2024 indicates a sellers’ market in Marin, Solano, and Sonoma and a buyers’ market in Napa

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 in the North Bay markets has trended higher throughout most of 2024. However, in October, MSI fell across markets, implying the market shifted more favorably toward sellers. Currently, single-family home MSI indicates a sellers’ market in Marin, Solano, and Sonoma and a buyers’ market in Napa.