Napa County Real Estate November 2019 Report

Long-Term Trends in Median Home Sales Prices

Using a six-month-rolling average of monthly median sales prices smooths out the often meaningless monthly fluctuations to illustrate broad, long-term appreciation trends with more clarity.

Sales Volumes and Median Prices by City

In this first chart, we have included some cities in Sonoma County to add further context to the greater Wine Country homes market.

Median sales prices are generalities that disguise a wide range of prices in the underlying sales, and how they apply to any particular home is unknown without a specific comparative market analysis. Median prices are more prone to fluctuate – without reference to changes in fair market value – in communities with lower sales volumes and wide ranges of sales prices.

Monthly Sales Volumes

An illustration of the substantial role of seasonality in the real estate market. One month’s sales volume mostly reflects accepted-offer activity in the previous month. Market activity hits bottom in December and January, which then makes January and February the months with the lowest number of closed sales.

Homes Going into Contract Quickly,
Subsequent to Receiving Multiple Offers

The percentage of 2019 YTD home sales that went into contract within 30 days of coming on market while receiving multiple offers is down from last year. About 1 in 8 such sales have occurred in 2019, and they averaged a sales price 2.4% over asking price – i.e. buyer competition pushed sales prices up.

Sales vs. Listings for Sale by Price Segment

Demand vs. supply: If the price segment’s percentage of sales is significantly lower than the segment’s percentage of listings available to buy, it signifies softer demand as compared to other price segments: This is the situation especially for $2 million+ segment in Napa with 7.4% of the area’s sales, but 28% of listing inventory. The median list price of active listings in this segment is a whopping $4.85 million.

The reverse is true for the $500,000 to $750,000 home segment: A higher percentage of sales (41%) than its percentage of active listings (24%) on the market – signifying much stronger demand.

These are generalities: Overpriced listings in any segment will typically fail to sell without price reductions, and appealing, well-priced listings can sell very quickly.

Home Listings & Sales by Month, $1 Million+

Active Listings within Month, $1 Million+: The number of higher-price listings in Napa County has surged in 2019, altering the balance between supply and demand.

Monthly Sales Volumes, $1 Million+

Market Dynamics by Price Segment

Location is, of course, always important in real estate value – within the county, within the city, within the neighborhood – but to a large degree, market dynamics within the county are also determined by the home’s price segment. And individual cities will often have homes in several or even all of the price segments broken out in the 2 charts below, with these segments seeing differing supply and demand conditions.

Generally speaking, demand is considerably softer and supply is higher (as compared to demand) above the $1.25 million price threshold, and that difference becomes much more substantial above $2 million. In this highest price segment particularly, correct pricing is an imperative.

Sales without Price Reductions
& Withdrawn (No-Sale) Listings

The following 2 charts illustrate both year-over-year changes in market conditions and the role of seasonality within the calendar year.

Last year saw a large jump in the number of listings pulled off the market without selling in November and December – this was a particularly volatile time in financial markets and interest rates were relatively high. The situation with both of those factors has changed dramatically in 2019, but it is too early to see how that will affect the number of listings withdrawn in the last 2 months of this year. It is unknown how the terrible fire in Sonoma will affect Napa County market dynamics.

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