2019 was a very productive year for real estate throughout California. Here in Sonoma County, the market kept a steady pace completely through the holidays, even though inventory was reduced, which is normal for the end of the year. As 2020 opens up, the market is ramping up again, as sellers that were holding off during the holidays are now ready to make the move. With Buyers that are out there, they are the more serious clientele, knowing what they want and will make a move if the price is right. The numbers of listings in Sonoma County as of January 28th are 630 and 341 of those are in escrow. So 2020 is off to a great start.
CURRENT UPDATE: The market is heating up with the buyers outweighing the listings currently on the market. We are seeing multiple offers again on fairly priced homes, making it very competitive for buyers and healthy for sellers. There is a careful balance however of not overpricing the homes as inventory is growing each day, which could balance the market a bit.
How The Market Is Leading
As 2020 opens up, we are still holding steady at historically low interest rates. The values in Sonoma County remain strong and with the demand for housing, values are predicted to appreciate more in 2020. The good thing about our market is that values have settled a bit from the Tubbs fire, meaning the highly escalated prices from a tragedy are now subdued. With that being said, any price reductions you are seeing are due to the price being overshot out of the gate, end of story. But, if a property is priced well, there is still the overbidding taking place, as the demand for housing here is running high. As spring approaches, you can expect more sellers and buyers, heating up the competition.
Economic Temperature – Election Year
2020 is going to be quite an explosive year. First, it is an election year, with one party trying to impeach the president, the Senate voting to do so and the House predicted to shut it down. The heat of politics fuels enough angst for some, but in all reality you have to look at what is. The economy is extremely strong. Unemployment is hovering around 3.5% where we haven’t seen this rate since 2000. The bull market will hit 10 years in March, making it the longest bull market in our history. Some are calling this a “super-cycle” which actually is known to proceed as deep recession, as the Great Recession of 2008. Bottom line however, the housing market is predicted to steadily keep growing in appreciations and sales.
Here is what I am saying when I say an explosive year. First, the political arena lights enough fireworks to disrupt dinner parties and end friendships. You have unprecedented numbers across the board, from the stock market, the run of the bull market, the value of homes and the interest rates. These numbers are not we are used to. But, if you look at the research, after coming out of the 2008 financial crisis, it makes sense that we are having the run we are now. Lessons have been learned and growth is expanding. It is a great cycle we are in.
What About A Recession
I am not a Pollyanna when it comes to the market. After time, things definitely do shift. What makes this market so unique is that our run has come after the “Great Recession” where the numbers declined worse than the “Great Depression”. This in itself is what has possibly put us in a super cycle. The other thing to keep in mind is that after 2008, ALL the rules changed, creating new structures industry wide, which set everything on a new path..the stock market, home values, mortgage lending and employment.
There are still discussions about the inverted yield curve and how that precedes a recession (historically), which started in 2019. You have more people selling to others on preparing for a turn in the market. Fear does breed fear, keep that in mind.
So in my opinion, should we start to see any adjustments in the market, they will be steady adjustments, like small steps. Barring any huge upheaval, which I think many markets are prepared for, we should not live in the past as we are heading to a 2008. We are in completely different times, with different players and unprecedented rules changing. Staying present with the facts is your most important decision. Read more about the 2020 outlook here…
Regardless of the varying opinions of the economy, all figures and stats point to a healthy economic situation at this time. Many factors can create change, but markets and investors are prepared and carefully watch the numbers. Being an election year seems to propagate questions, which is normal. But the facts always tell the truth. Our market is extremely healthy now seeing new levels of growth. This actually should be something that is celebrated, not feared. If fear is your game, trust me, you will make it a reality for yourself.
Keep in mind, there is plenty of money out there just waiting to invest in the real estate market, no matter the market is doing. Those are the fearless….