Napa County Home Prices, Market Conditions

The next chart compares the year-over-year changes in sales for homes selling for over and under $2 million. Sales in the higher price segment saw a very substantial surge in 2020, while sales under $2 million saw a smaller increase. Neither statistic really does justice to the rapid acceleration in market activity occurring in the second half of the year.

Generally low inventory levels of listings on the market have played a large role in the heat of the market. 

Month by month, year-over-year comparison of the number of listings accepting offers (going into contract) - illustrating the initial pandemic drop in activity followed by the market rebound that saw monthly market activity climb far above the levels of the previous year. 

The 2 tables below reflect market statistics and values for Q4 2020 only. They will often be different than those for the full year 2020. Median sales values can fluctuate for a number of reasons, and are especially prone to do so in markets with low sales volumes and wide ranges in home prices. Most of Napa's communities have both relatively affordable segments as well as extremely expensive homes.

Luxury home sales in Napa and Sonoma Counties by city and price segment: 

The tremendous surge in luxury home sales in Q3 softened in Q4, undoubtedly affected by the early autumn fires. 

Two of the factors behind the housing market recovery were the dramatic drop in interest rates, and the significant rebound in the stock market – especially in the stock prices of some of our Bay Area high-tech giants. 

Though Covid-19 upended many normal seasonal trends this year, and then the fires added their impacts, the market did begin its typical “holiday season” slowdown in November - however activity remained well above levels of last year. It is unknown how the latest pandemic circumstances may affect the market in December, which is usually by far the slowest month of the year. 

Despite the fires, Napa County ranked second in the Bay Area for the largest year-over-year percentage increase in dollar volume sales since the pandemic struck. 

As pandemic and fires hit, the number of new listings coming on market saw sharp declines, but then spiked back up each time. Market activity usually begins its big holiday season drop in November, with activity hitting its annual low point in December. 

A major factor in the market has been the relatively low levels of inventory this year. 

Market activity, as measured by the number of listings going into contract, peaked in summer. Then the fires had an impact. Though dropping in October and November - as is the normal seasonal trend - the number in November was 38% higher than in November 2019. 

The below chart measures demand as compared to the supply of listings available to buy, i.e. the percentage of active listings going into contract during the month. The percentages in summer and fall 2020 ran far above the same periods of last year.  

Strong buyer demand and low inventory brought about a considerable year-over-year decline in the number of price reductions. 

Luxury home sales soared in the Wine Country to new heights, but was then severely affected by the fires. Still, Napa County luxury home sales were up 43% since the pandemic hit as compared to the same period of 2019.  (By total number of annual home sales, Napa County is the smallest real estate market in the Bay Area.)

Highest priced listings on the market in early November, and the highest priced MLS home sales occurring May through October 2020, by Bay Area County. 

And interest rates hit another all-time low in early December. 

The long-term median sales price chart below is similar to those for counties around the Bay Area - a significant spike in median house prices since the pandemic struck in early spring.

The county market has been deeply affected by multiple disasters this year. In normal years, activity typically begins a big slowdown in late-October/early-November, running through the mid-winter period, then waking up in early spring. We suspect Q4 will continue to slow down, but remain more active than in past years. 

Home sales breakdown by price segment and bedroom count: Napa County has a substantial market for luxury homes and estates, but the majority of homes sell for under $1,000,000. 

Along with Monterey County (+56%) and Santa Cruz County (+51%), Napa (+49%) has seen the largest year-over-year increase in buyer demand in the Bay Area: Buyers looking for lower population density, better quality of life, and/or more affordable home prices. As measured by the percentage of listings accepting offers, San Francisco was the only county to see a year-over-year decline, fueled mostly by a dramatic softening in its large condo market. 

Following is a series of analyses that look at city median house sales prices, sales volumes, luxury home sales, listings for sale, and a few standard measurements of supply and demand. Note that markets with substantial luxury home and estate segments often see softer dynamics - the pool of buyers is much smaller, and overpricing more common for these very special properties - but this is not always the case. 

Regarding the next chart: Percentages of 50% or more would typically be considered to reflect a high-demand market. Over 60% signifies very high demand, or as it climbs, extremely high demand. As mentioned before, markets with very substantial luxury home segments as a percentage of listings - such as St. Helena - often see softer supply and demand indicators.