Email  Print

New Escrows in Sonoma Valley Reveal Encouraging Movement

New Escrows in Sonoma Valley Reveal Encouraging Movement
Real Estate News v. “Noise”
by Jill Silvas

We recognize the “noise” you are exposed to via national and regional real estate news and quarterly reports. Most of these reports track closings (sales) and are reported anywhere from 30 – 60 days after the completion of the research cycle (either monthly or quarterly). The information is, by design, general in nature and somewhat dated by the time it is published. The S&P/Case-Shiller Report Index™ and the First Republic Prestige Home Index™ both report sales on a month-to-date, quarter-to-date or year-to-date basis. These reports provide retrospective and relative indicators of value and activity; however, they do not provide insight into future trends on a local basis.

Please understand that we believe real estate is local and furthermore, market activities and trends can be unique within a market (county) by neighborhood and/or by price point. We also believe that Properties “under contract” or “new escrows” are the industry’s most meaningful indicator of near term trends.

Our review of Sonoma Valley real estate “under contract” or “in escrow” reveals encouraging movement. The
chart below illustrates current trends (by percentage) for properties currently “under contract” as of the end of June. While your specific neighborhood may be performing differently and pricing may be less than meets sellers’ expectations, our markets are continuing to experience movement, at least in terms of units “under contract”.

Over 35% under contract is usually indicative of a sellers’ market while under 25% is usually indicative of a buyers’ market and the range between 25-35% under contract indicates a balanced market. This suggests that a seller’s pricing is critical to be seriously considered as an attractive purchase opportunity for a qualified buyer v. simply one of a long list of active inventory of homes for sale. One should not underestimate the power of demand-based pricing. By listing the property within local market demand tolerances, it will likely ratify a new escrow. By flirting with the high-end of the pricing range, one should prepare to simply be part of the inventory statistics.

In this market place, we encourage families to make housing decisions first, on the quality of the environment they are striving to accomplish at home and second, on the opportunity associated with their investment. It is our feeling that a “buy and hold” strategy for at least five (5) years will likely be a lucrative investment. We do not see the “buyers’ window” closing. In a broader sense, we see more realistic sellers everyday which translates into more demand based, realistic pricing for pre-qualified, motivated buyers!

Please remember to seek out local news, trend analysis and advice for your real estate decisions. If you are a seller, be proactive in your presentation (by staging when recommended) and meet market demands with pricing. If you are a buyer, seize opportunities when they arise, as the truly best priced properties generally receive multiple offers.

As always, I am available to assist you with any of your real estate needs and look forward to hearing from you. Have a great summer.

Jill Silvas
Pacific Union International
707-939-9500
jill.silvas@pacunion.com