With sales volume in national, regional and local real estate markets at 30-year lows, there are signs that some North Bay residents finally appear ready to get return to buying housespartly inspired by drop in interest rates.

Real estate markets are largely influenced by interest rates, the supply of available housing, and buyer sentiment or confidence. When these elements come together, our markets can have an incredible cadence that leads to long growth cycles. If not, then our markets exhibit the stagnant nature they have experienced over the previous 24 months. Recent sales data indicates a shift may be coming as we move through winter and spring.

According to BAREIS MLSSonoma County buyers successfully closed deals to purchase 374 single-family homes in September, 14% ahead of last year at this time. Owners delivered 295 new offers during the month, a 15% decline from 2023 and another new all-time low for the period. Buyers managed to finalize the purchase of 327 homes, 13% more than the 289 units whose ownership was transferred last year at the same time.

With October now in play, buyers will be looking at the remaining 897 available homes in Sonoma County – a significant 23% rebound above the 30-plus year low we saw last year at the same period.

As the year continues to take shape, shoppers will make decisions on these deals, as well as new ones launching, and decide whether to buy now or wait to buy. This will be reflected in a common market metric: the absorption rate.

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% and above – indicates that the supply of available housing will decrease, increasing the chances that a homeowner will sell their property in a shorter time frame. Conversely, an absorption rate below 15% indicates a buyer’s market, meaning homes sell more slowly.

In Sonoma County, September activity left us with an increased absorption rate of 37%, highlighting that buyers are still working harder than historical normal to find the home they want – at a rate of interest that suits them. That should also mean they’ll be more likely to continue their purchases this month as interest rates on loans move away from their lowest levels since the Federal Reserve’s last rate cut. Rates are now once again in the range of 6% to 6.75%, depending on the loan product chosen.

Marin County property owners submitted 175 new offers on single-family homes in September – another all-time monthly low and 10% fewer than a year earlier. These woefully insufficient inventory levels could continue to create a more competitive environment for new and existing buyers looking to make Marin their home this year. Buyers absorbed 198 homes in completed deals, while sellers completed the sale of 149 homes during the period – just 2 more than last year – leaving the entire region with 391 homes available for sale. buyers in October.

Marin’s absorption rate for the month lost some momentum to close the period at 38%, more in line with neighboring markets.

A slightly different story to the east, Napa County markets remain balanced for the fourth straight month. In September, 103 new listings hit the market, just 1 unit fewer than last year, leaving 397 homes available to buyers in October. Buyers placed 75 new transactions in escrow, nine fewer than last year, while closed transactions tipped the scales at 73 during the month, 12% more closings than the same period a year ago.

This combination of new releases coupled with buyer activity has allowed Napa’s absorption rate to stabilize at 19%, demonstrating that this market is stabilizing. This means that buyers and sellers must be open to thoughtful negotiations now that the rules of the game have adjusted.

Jeff Schween is one of Compass’s “Top 1% of Real Estate Agents.” You can reach him via his website at SantaRosaFineHomes.com.