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Hi and welcome to the August edition of our Wine Country Real Estate Newsletter. As the summer sun bathes the vineyards in golden light, we are excited to share the latest updates and market insights with you. We’ve got a lot to talk about this month, including fundamental changes to how brokers and agents interact with clients through the buying and selling of residential properties!
Beginning August 12th there are significant changes in how real estate is bought and sold in California. Here’s the background:
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In March 2024, The National Association of Realtors announced a proposed lawsuit settlement that included a monetary settlement, as well as two changes to business practices: 1) removal of the offer of Buyer Agent Compensation in NAR-owned Multiple Listing Services (MLS) and 2) adding a requirement for Buyer Agents to use Buyer Representation Agreements.
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Historically in California, many seller’s brokers used an MLS to make an offer to compensate a buyer’s broker who procured a buyer for the seller’s property. However, the NAR settlement now prohibits the seller’s broker from doing so (and the California Association of Realtors listing agreement no longer provides for such offers of compensation).
What does this mean and how does it impact sellers and buyers?
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Buyers and sellers must now separately negotiate compensation with their respective brokers.
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Every buyer is now required to sign a Buyer Representation Agreement formalizing the relationship between the buyer and broker before touring properties or meaningfully discussing properties. This is something that has been required in many states for over a decade. This agreement will disclose the broker’s compensation and the duration of the relationship.
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Buyers visiting an open home will be required to sign in to clarify the showing agent and visitor’s relationship.
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For sellers, the option to make an offer of compensation to a buyer’s broker is being removed from the MLS and all related forms. Sellers retain, as they always have, the discretion to offer compensation to buyer’s brokers. The settlement does not prohibit their ability to do so.
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How does a buyer’s broker get paid? Two ways: 1) The buyer pays the commission pursuant to the buyer representation agreement, or 2) The buyer negotiates for the seller to compensate the buyer’s broker.
Our thoughts on the NAR changes:
We believe strongly in transparency around broker compensation. While the buyer's agent commission can no longer be displayed on the MLS, it can still be advertised, offered, and negotiated outside of the MLS.
Real Estate is a relationship-based business, and the trust we’ve earned with our clients is something we greatly value. Together, we will navigate these changes to rules and regulations in our industry while continuing to provide the same exceptional service we always have. Don’t hesitate to reach out to learn more about these changes - it's confusing!
Interest Rates: On Wednesday, Federal Reserve Chair Jerome Powell hinted at a potential rate cut in the central bank's upcoming meeting on September 17-18. Despite calls for a cut, the Fed kept its key interest rate unchanged at 5.3%, citing progress toward lower inflation and a more stable job market. If inflation continues to decline, Powell stated that a reduction in the policy rate could be considered. The markets are projecting a modest lowering of interest rates. Current 30-year fixed jumbo loan rates are approx. 6.9%, down 0.1% from last week (Bankrate).
National vs. Local Dynamics:
Nationally, the year over year, the median single family home sales price was up 4.1% to $432,700, a new high. The supply of listings for sale rose 23.4% year over year, to the highest monthly count in almost 4 years. The number of sales declined 7.4% from May and 13.4% from June 2023, while price reductions in the 2nd quarter jumped 52% year over year (Data from NAR).
In our local Sonoma Valley market, the median single family home price in July was $1,170,000, up 19% from June 2024 but down 7.9% year over year. Median price per square foot was $657, down 5.4% from June 2024 and down 6.7% from last year. Months of inventory was 4.5, up 10% from June 2024 but down 0.9% year over year (4.0 to 6.0 is considered a balanced market that favors neither buyer or seller). The number of homes sold was flat from June 2024 but up 14% from last year (Data as reported to BAREIS).
If you have any questions about the current market conditions in your neighborhood, don't hesitate to reach out. Thank you for being a part of our real estate community, and we're eager to support you on your real estate endeavors.
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Sonoma County Price Trends
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BAY AREA LUXURY MARKET UPDATE
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Aug 1st - 11th | Various times
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A celebration of community spirit, agriculture, entertainment, and wholesome fun. 10 amazing days filled with thrilling rides, delicious food, live music, and unforgettable memories.
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This iconic summer playlist spotlights popular music from yesterday and today, with a few surprises as well! Whether you’re swaying to the music of beloved singer-songwriters, getting down with today’s hit-makers, or jammin’ to Motown classics, this musical celebration will leave a song in your heart and a skip in your step.
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AUG 10th&11th | Various times
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Enjoy live music on two stages, all things Gravenstein in Apple Alley, fabulous local food, art & crafts vendors, activities for kids, farm animals and demonstrations, craft ciders, microbrews, premium wines, Artisan Tasting Alley, and VIP Lounge. Awarded Bohemian‘s “Best Festival” for 2023 & 2024
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Exceptional 10 parcel estate and luxury resort compound $9,588,000
Seller Financing Available.
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sonoma valley - represented sellers
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4 BD 4 BA 3850 SF $2,900,000
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Listing Neighborhood - represented buyers
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4 BD 4 BA 3245 SF $2,789,000
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sonoma - represented sellers in an off market sale
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19401 Sleepy Hollow Court
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3 BD 2 BA 1554 SF $1,100,000
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Boyes Hot Springs - Repesented buyers
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2 BD 1 BA 865 SF $800,000
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Healdsburg - representing buyers
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Historic Changes Coming To Buying and Selling
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‘It’s the most significant change to real estate in over 100 years,’ one real-estate startup says of NAR settlement
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The right style can help earn the highest ROI.
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10 Hotels for Design Inspiration
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See how you can make the most out of your outside space with 30 top garden trends for 2024.
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Thanks for reading and subscribing! When it comes to building wealth, nothing beats homeownership.
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Compass is a real estate broker licensed by the State of California operating under multiple entities. License Numbers 01991628, 1527235, 1527365, 1356742, 1443761, 1997075, 1935359, 1961027, 1842987, 1869607, 1866771, 1527205, 1079009, 1272467. All material is intended for informational purposes only and is compiled from sources deemed reliable but is subject to errors, omissions, changes in price, condition, sale, or withdrawal without notice. No statement is made as to the accuracy of any description or measurements (including square footage). This is not intended to solicit property already listed. No financial or legal advice provided. Equal Housing Opportunity. Photos may be virtually staged or digitally enhanced and may not reflect actual property conditions.
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