A tradition of lucky money

This article is reprinted from Wine Country Real Estate, a special advertising section of The Press Democrat.

Chinese months are reconciled by the lunar calendar with each month beginning on the darkest day. New Year's celebrations begin on the first day of the month and continue until the fifteenth, when the moon appears brightest. The legend behind the Chinese zodiac is that Buddha requested all the animals to meet him on Chinese New Year - only twelve showed up - thus he named a year after each one. It was then announced that those born under the sign of the year would possess some of that animal's personality. Being the year of the sheep, it is commonly thought that those born of this sign are sweet, charming and sensitive while likely being the most creative sort of any of the other eleven signs. As our Northbay real estate markets get rolling this year you may find the need to be creative in your approach to obtaining your new home as the swollen inventories of the Great Recession have given way to tightly constrained markets.

We have seen single family homes make significant gains back to nearly their pre-meltdown prices. The market has also had a substantial appetite for multi-unit investment properties and land, both residential & agricultural, though nothing has truly rivaled the velocity of sales and robust absorption rates experienced in the world of condominiums. This niche of the market usually trails the single family home market at both ends of its cycle and the prior 12 months have been no exception.

Sonoma County, the largest in the North Bay by population, saw December close with a significant 34 percent contraction in inventory from the prior month. According to BAREIS MLS, Sonoma County finished 2014 with a bang - just like the year before. As the case has been all year, the inventory that came forward each month was met with vociferous demand from buyers. The average price of a condo or townhome in Sonoma County climbed 34 percent from the same time last year to settle at $322,000 – that's an $83,000 gain in this metric.

The overall marketplace has seen very heightened and steady demand throughout the entire last year. In total, as 2014 came to a close, Sonoma County buyers had successfully purchased 602 units. The markets insatiable desire to own real estate was reaffirmed in December as the absorption rate steadied at 94 percent – currently the highest in the North Bay, further suggesting that the rate of sales and appetite to acquire is still extremely high as buyers encounter multiple offers on nearly every unit in this category.

The absorption rate is calculated by dividing the total number of homes sold in a month by the total number of homes available for sale at the end of the same month. A high absorption rate – 20 percent and above – indicates that the supply of available homes will shrink rapidly, thereby increasing the odds that an owner will sell a property in a shorter period of time. Conversely, an absorption rate below 15 percent is indicative of a buyer's market, meaning homes are selling more slowly.

As the markets to the north were searing, Marin County's condo market trailed very closely. Having a well located condo in one of America's most affluent markets has paid many a good dividend over time. During the course of 2014, the vigorous nature of buyers truly shined through as 768 units changed hands and even as December came to an end the absorption rate sat comfortably at 70 percent. Marin's markets are controlled by those who own property not those seeking it. The average price of a townhome or condo in this county has fluctuated mightily over the year but as 2014 closed it stood at $502,000.

The more general rural nature of Napa County has traditionally exhibited less availability of townhome style properties as it did not experience the development of this particular housing unit as widely as its' neighbors to the South and West. From January through December of 2014 Napa County buyers managed to acquire 140 units. The Napa market closed the year with an absorption rate of 40 percent, indicating that the pace of sales is definitely still robust. The county's average price for this type of housing settled to $324,000 – just two percent more than where it began than year at. As the general supply of condos or townhomes in this market is relatively small prices can swing abruptly month to month.

Feeling lucky? It is believed that the color red, representing fire, drives away bad luck. So, have a prosperous year and celebrate in your favorite red outfit as you construct poems on red paper while being sure to hand children 'lucky' money in red envelopes to extend your own good fortune throughout the new year. You will need it to be successful in this marketplace riddled with continued supply constrained conditions.