T
he Los Angeles wildfires will have a ripple effect on the North Bay housing market, driving up construction costs and exacerbating the existing acute housing shortage. As thousands of homes are destroyed in Southern California, demand for building materials like appliances, windows, and roofing will surge, affecting our region as well.

    This disaster will lead to an escalation in home prices and construction costs, with new buyers entering the marketplace after losing their homes. It may take 10 years or more to fully recover from this loss of housing stock. In the meantime, the increased demand for new homes will drive up prices, making it even tougher for prospective buyers.

    The North Bay is already facing a seller's market, according to BAREIS MLS data. December sales in Santa Rosa show a tight inventory with 44 new single-family homes listed, a 29% decrease from last year. Buyers snapped up 72 homes during the holiday month, while sellers handed over keys on 92 completed sales.

    The Months' Supply of Inventory (MSI) level in Santa Rosa is 1.9, indicating that sellers are exerting more influence on the marketplace than buyers. Northeast Santa Rosa saw a mere 13 new single-family homes listed last month, a 48% decrease from the same period a year ago. The supply was already tight with 66 homes available for house hunters.

    In Southeast Santa Rosa, the supply of listed properties is at 24 as January opened, a 14% decrease from last year. Oakmont has experienced heightened demands from buyers and saw only three new listings in December. Northwest Santa Rosa remained extremely active, with buyers having offers accepted on 26 deals, leaving 42 single-family homes available for sale.

    The North Bay's housing market is facing significant challenges due to the Los Angeles wildfires and existing supply shortages. As Jeff Schween notes, this disaster will have far-reaching effects on construction costs and home prices in our region.