Pam Buda presents some stats that might make you think a sellers market is back in Sonoma County given that inventory to sales is plunging. However, I can’t get her numbers to add up. I’ll quote her at length:


Two years ago at this time real estate inventory started to pile up and nearly 3800 homes were for sale in Sonoma County. The years of seemingly unending price increases were starting to slow and reverse course. In October 2007 there were 3787 homes for sale and 606 sold that month. At that rate of sales, there were 12.5 months supply of inventory.

Fast forward two years and there are only 2368 homes for sale in Sonoma County and 431 of them sold in October. So while the number of sales was down slightly versus two years ago at this time, the total number of available homes was down significantly. At the current rate of sales, there is only a 2.2 months supply of inventory.


Maybe I’m missing something but if were calculating MSI as Inventory/Sales as she seems to be suggesting then in October 2007 we calculate 3787 Inv/606 Sales= 6.2 MSI. For October 2009 we get 2368 Inv/431 Sales = 5.5 MSI. Not quite as drastic as a fall from 12.5 to 2.2. Possible she is using a trailing 12 month sales average but those are not the numbers she presents. Either way, her numbers are confussing.

I think an easier way to look at the numbers is to note that from Oct 07 to Oct 09 inventory in Sonoma County is down 37.5% (3787 to 2368), while sales are down 29% (606 to 431).

But… while we have hard stats to show that sales were down 29% over a 2 year period in October, the same cannot be said for inventory. Many houses in Sonoma County that are or soon will be for sale are NOT listed. If we’re to extrapolate from a study by the Amherst Securities Group that looked at shadow inventory in the Bay Area there could be actually more than double the inventory numbers stated by the MLS.

In short, don’t panic and feel you need to buy now because inventory is dwindling. Even using Pam’s numbers the drop doesn’t appear to be as drastic as she states and there is more behind the inventory numbers than meets the eye.

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