Despite the ongoing health and economic crisis precipitated by COVID-19, the Napa County real estate market staged a remarkable recovery from the steep year-over-year declines in March and April. Demand for high-end homes, in particular, has been very strong across the Wine Country and, indeed, the Bay Area as a whole. More affluent buyers – the demographic least affected by COVID-19, unemployment, and also having the greatest financial resources – have been jumping back into the market to a greater degree than other segments.

The first chart below illustrates the rebound in buyer demand, as the number of listings accepting offers in June 2020 soared well above last year’s levels.

In a fascinating shift, the Bay Area markets with the largest year-over-year increases in the number of listings accepting offers in June 2020 were the 4 “outer” Bay Area counties: Monterey (up 61%), Santa Cruz (58%), Sonoma (47%) and Napa (37%). These are huge jumps. These 4 also have among the lowest population densities in the Bay Area. The more urban counties saw much more modest y-o-y increases: San Francisco (6%) and Alameda (7%).

Two charts illustrating the big, sudden jump in higher-price home sales activity in Napa. The county is a relatively small sales-volume market, with sales across an extremely wide range of prices. This makes many of its statistics more prone to fluctuation, especially in shorter time periods.

Closed-sales volume is a lagging indicator, reflecting offers accepted 3 to 6 weeks earlier. Therefore, the recent rebound in demand does not show up well in Q2 sales numbers – which plunged due to the crash in demand in early spring.

Median house sales prices have been relatively steady over the past 5 quarters.

Average dollar per square foot values can be significantly affected by increased sales of high-price and estate homes, especially if on larger lot sizes/ acreage. (Land value gets mixed up into house dollar per square foot value.)

The inventory of homes for sale in June 2020, though climbing rapidly, remained slightly below the level in late spring 2019.

Average days on market followed by sales price to list price percentage, both standard indicators of demand.

Home price tables for Napa County communities as well as selected markets in Sonoma. Note that some submarkets in Napa have relatively few sales across a wide range of sales prices. This makes median home price calculations less reliable.

And mortgage interest rates hit yet another historic low, adding fuel to buyer demand.