Bobbing for apples may be easier than predicting Napa Valley real estate trends

Carol Lloyd, a real estate columnist for the San Francisco Chronicle, seems to have the best perspective on the current real estate market, “It all depends if you see the glass as half empty or as half full.” Other respected authorities like Ethan Harris at Lehman Brothers claimed during a recent interview with the Wall Street Journal claimed during a recent interview with the Wall Street Journal “we are nearing the end of the slowdown for most markets.”

In reality, gone are the days of making broad brush assumptions about the overall real estate market. Today we have to closely examine the micro or nano markets in our county–which vary differently from community to community—to get a true picture. Let’s take a look at the statistics below.

Residential RE Sales in Napa					Residential RE Sales in Napa County
	Sept	Oct	Nov	Total		Sept	Oct	Nov	Total
2006	78	90	45	213		112	122	70	304
2005	95	93	76	264		137	124	115	376

Months of Unsold Inventory as of November 30, 2006
Napa County	Napa	St. Helena	Yountville
7.4	6.4	7.2	9.5

In spite of much of the negative press the Bay Area real estate market has received in recent months, residential sales in Napa and Napa County were almost the same in October for both 2005 at 93 and 124 units sold respectively compared to 90 and 122 in 2006. What’s important about this number is that October 2005 represented a boom market and 2006 sales for the same period represented 96-98% of that total. It remains to be seen whether this trend will continue, but given the current inventory in the market, particularly in Napa, sales of properly priced and correctly staged homes should remain strong. A seven month supply of inventory is considered a balanced market. As inventory levels fall below 7 months, home prices and sales generally strengthen and can result in multiple offers.

Just recently I received multiple offers on a listing in Browns Valley, that despite its’ exceptional value had been on the market for several months. In response, I would describe the market as subtly active. That is particularly true in Napa where inventories are low; and for sellers who are considering listing their homes during the holidays, this could be a good time to attract sophisticated buyers looking to move to Napa County.

One trend we continue to see is that areas with unique homes like Tiburon—where sales volume increased 3.7% in September and the median price rose a whopping 24.2%–and the Napa Valley which attract retirees and upscale second home buyers, there will always be folks willing to pay the price to live here.

So you tell me. Is the glass half empty or half full? As an optimist, I believe Napa Valley remains a great place to own property and a strong market given all the negative news we’ve read. If you are considering listing your home or would like to own your own piece of the Napa Valley, call me so that I can time the market for your particular sale or purchase.