T
he North Bay's real estate market may finally be showing signs of breaking out of its prolonged slump, with interest rates playing a key role in this potential shift. Historically, interest rates, home supply, and buyer sentiment have been the primary drivers of the market's cadence, leading to either growth or stagnation.

    Recent sales data suggests that buyers are starting to regain momentum, particularly in Sonoma County. According to BAREIS MLS, September saw a 14% increase in single-family home purchases compared to last year, with 374 agreements successfully entered into. Meanwhile, new listings dropped by 15%, reaching another historical low for the period.

    As of October, there are 897 available homes remaining in Sonoma County, a significant 23% bounce above last year's numbers. The absorption rate, which measures the ratio of sold homes to available inventory, has also increased to 37%. This indicates that buyers are working harder than usual to find their ideal home at an acceptable interest rate.

    In Marin County, new listings hit another all-time low in September, with 175 single-family offerings introduced. However, buyers absorbed 198 homes through consummated contracts, leaving the region with 391 dwellings available for purchase. The absorption rate in Marin also rose to 38%, more in line with neighboring markets.

    Napa County's market remains balanced, with a steady absorption rate of 19% over the past four months. September saw 103 new listings released, while buyers placed 75 deals into escrow and closed 73 transactions, a 12% increase from last year. This stability means that both buyers and sellers must be prepared for thoughtful negotiation.

    As interest rates stabilize in the 6-6.75% range, buyers will continue to make decisions on available homes and new listings. The absorption rate will remain a key indicator of market trends, with high rates indicating a shrinking supply and increasing odds of a sale.