North Bay December '24 Real Estate Update Ascend RE

The Local Lowdown

Quick Take:

The median single-family home prices fell in November but are still near their record highs with the exception of Marin, which peaked at over $2.2 million back in 2022. We expect prices to contract through January 2025.
Total inventory fell 56.3% month over month, a massive and surprising drop, which isn’t accounted for by fewer new listings or more sales. We expect inventory data to correct next month as more agents enter their listings into the MLS.
Months of Supply Inventory fell across the North Bay in November, implying a shift that favors sellers. MSI indicated a sellers’ market in Marin, Solano, and Sonoma and a buyers’ market in Napa.

The median single-family home price fell slightly month over month, typical for November

Single-family home prices in most of the North Bay are near record highs, except in Marin. Rising inventory and high demand have offset downward price pressure from higher mortgage rates. Year-to-date prices rose across the region, except Napa, and year-over-year, most markets are up, with Marin down. Prices peaked in the summer and are expected to decline slightly over the next two months.

Single-family home inventory plummeted in November

In 2024, the housing market had been improving each month until November, when inventory dropped by over 50%, erasing earlier gains. While sales volume remained similar to last year, more new listings had boosted inventory. Typically, inventory increases from January to August, but the November decline was unexpected. It’s unclear if sellers pulled listings due to higher interest rates or if it was a data error. We’ll analyze more next month. In November, while new listings fell, the drop in inventory was too large to be explained solely by this. The North Bay market, sensitive to mortgage rates, likely saw slower activity due to rate increases.

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

Months of Supply Inventory (MSI) measures how long it would take to sell all current listings at the current sales rate. In California, an MSI around three months indicates a balanced market. An MSI below three signals a sellers' market, while above three signals a buyers' market. MSI in the North Bay trended higher in 2024 but fell in October and November, indicating a shift toward a sellers' market in Marin, Solano, and Sonoma, and a buyers' market in Napa.

Bottom Line

In November 2024, the North Bay housing market saw a slight month-over-month drop in single-family home prices, typical for the season. Despite high demand and rising inventory, prices in most areas remain near record highs, except in Marin. Year-to-date prices rose across the region, with the exception of Napa, and most markets saw year-over-year increases, while Marin experienced a decline. Inventory plummeted by over 50% in November, unexpectedly erasing earlier gains, possibly due to higher mortgage rates or a data error. Months of Supply Inventory (MSI) shifted toward a sellers’ market in Marin, Solano, and Sonoma, while Napa remained a buyers’ market.