The Big Story

Quick Take:

Although affordability has been improving over the past few months, monthly P&I payments are still quite a bit higher than they were last year.
Despite political moves that some believe were designed to bring down interest rates, mortgage rates remain high, as the lending market prices in future uncertainty.
On a national level, inventories are increasing at a very rapid rate, while the number of homes sold has declined.
Over the past couple of months, the macroeconomic environment has been incredibly unpredictable, a trend which looks like it will continue over the coming months.

Note: You can find the charts & graphs for the Big Story at the end of the following section.

*National Association of REALTORS® data is released two months behind, so we estimate the most recent month's data when possible and appropriate.

Growth in median monthly P&I payments continues to outstrip inflation

For quite some time, we’ve seen monthly inflation readouts with figures in the 2-3% range. Despite the fact that inflation seems to be under wraps for now, the median monthly P&I payment has grown faster than inflation, with the most reading coming in at $2,113, representing a 3.94% increase on a year-over-year basis. This shows that there are still inflationary pressures at work in the housing market.

Factors contributing to this inflation will vary by market. Some markets have more of an issue on the supply side (i.e. higher construction/materials costs), while others have an issue with the demand side (i.e. more demand for homes than supply). It will be especially important to pay attention to this metric over the coming months to get a gauge of how inflation is impacting the housing market.

Mortgage rates remain high, despite looming economic uncertainty

Mortgage rates have remained high, in the mid to high-6% range for quite some time. Some believe that the recent trade war was being implemented in part to bring down interest rates. However, judging by recent commentary from the Fed, the trade war and the associated uncertainty, has only made Fed officials more cautious in utilizing the incredibly powerful economic tool that is the federal funds rate.

This means that we are probably going to see elevated mortgage rates for the foreseeable future, unless the economy takes a considerable turn for the worse. It is worth noting though, that according to the Fed’s “Dot Plot”, the majority of Federal Reserve officials predict the federal funds rate will be in the 3.75-4.00% range by the end of the year, and the 3.25-3.50% range in 2026.

Inventories continue to build across the country

The moves in sales and inventory that we’ve been seeing throughout California over the past few months have been echoed on a national scale. The nation as a whole has seen inventories build, as homes sit on the market for longer. Our most recent data point (April 2025), shows that inventory increased by 20.83% on a year-over-year basis, to 1,450,000. Meanwhile, existing home sales decreased by 3.38%, to 4,000,000.

Despite the growing backlog of inventory, median sale prices are still trending upward, with the median listing selling for $414,000, representing a 1.82% year-over-year increase. To add fuel to the fire, we’ve seen growing numbers of listings hitting the market, with the number of new listings hitting the market increasing by 7.19% on a year-over-year basis.

Ultimately though, this is just what we’re seeing at a national level. As we all know, real estate is an incredibly localized industry, so knowing what’s going on in your own market is pivotal. Below is our local lowdown, that outlines everything you need to know about what’s happening around you in your neighborhood and surrounding areas!

Big Story Data

The Local Lowdown

Quick Take:

Median sale prices in the East Bay remain shockingly resilient, barely moving on a year-over-year basis.
With considerably more inventory on the market than this time last year, inventories have exploded in the East Bay.
Although Inventories are up, listings are still being bought up at break-neck speeds.

Note: You can find the charts/graphs for the Local Lowdown at the end of this section.

What’s Moving: Sold Homes & Upcoming Listings in SF

Looking to buy or sell? Interview me for the job...

Call Charlie 415-722-3493.

The East Bay has retained its tremendous resilience

Over the course of the past two years, single-family homes in the East Bay have had shockingly little movement in median sale prices, making it one of the least volatile counties within the Bay Area. Last month, the East Bay extended this streak, as median sale prices for single-family homes decreased by 0.01% in Contra Costa County, and 1.46% in Alameda County. On the flip side, the condo market hasn’t enjoyed this stability so far this year. Median sale prices for condos in Alameda County were down 16.43% on a year-over-year basis in Alameda County, while median sale prices in Contra Costa County were down just 0.71%.

Inventory levels continue to surge upward throughout the East Bay

Although prices have been incredibly resilient in the East Bay, the future of this stability is very uncertain, as inventories have been growing at a tremendous rate. In the single-family home market, the East Bay saw a new 2-year high in terms of inventory, as the number of active listings grew by 31.42% on a year-over-year basis. Condo inventories pulled back from their 2-year high this month, but still grew by 22.80% on a year-over-year basis.

While there are roughly the same number of single-family homes and condos hitting the market, what’s causing inventories to spike is the fact that fewer listings are being sold. We saw 15.57% fewer single-family homes and 25.09% fewer condos sold in the month of May when compared to a year ago.

Listings are spending comparatively more time on the market

The East Bay is quite interesting when you look at the amount of time listings are spending on the market. If I told you that the average single-family home in Contra Costa County is spending 40% more time on the market now than it was last year, you’d probably assume that listings are sitting for weeks on end. However, homes are still moving incredibly quickly. Despite spending 40% more time on the market, the average single-family home in Contra Costa County is taken off the market in just 14 days.

The single-family market is dominated by sellers, while the condo market is controlled by buyers

When determining whether a market is a buyers’ market or a sellers’ market, we look to the Months of Supply Inventory (MSI) metric. The state of California has historically averaged around three months of MSI, so any area with at or around three months of MSI is considered a balanced market. Any market that has lower than three months of MSI is considered a sellers’ market, whereas markets with more than three months of MSI are considered buyers’ markets.

The East Bay continues to be divided, with buyers having more control of the condo market, and sellers having more control of the single-family market. In terms of single-family homes, there are 2.3 months and 2.8 months worth of supply on the market in Alameda and Contra Costa Counties, respectively. Whereas there are 4.8 and 3.9 months worth of condo supply on the market in those same areas.Despite fewer listings hitting the market, median sales prices remain roughly flat

As of right now, median sale prices throughout the North Bay are mostly flat, with single-family homes in Sonoma and Marin Counties experiencing a 0.59% and 2.93% year-over-year increase. Whereas, single-family homes in Solano and Napa Counties experienced a year-over-year decrease of 0.41% and 0.52%, respectively. It’ll be important to keep an eye on the trends that we see in median sale price and its relation to the number of active listings over the course of the next few months, as we’re certainly going through some unprecedented economic events.

Inventory levels remain lower than they were last year

Unfortunately, over the course of the past month, we didn’t see many new listings hitting the market, causing us to see a month-over-month drop in the total number of active listings on the market. In the month of April, we saw a 16.61% decrease in active listings on a year-over-year basis, and a 15.87% decrease on a month-over-month basis, which is quite incredible. This drop in active listings can largely be attributed to the fact that we saw nearly 30% fewer listings hitting the market in April, when compared to last year. At the same time, the number of listings that were sold stayed roughly flat, decreasing by just 1.41%. At this point in time, we’re going to need to see a large bump in new listings to get the market back on track for inventory growth.

The median listing is spending slightly more time on the market than it did last year

When you hear that there are fewer listings hitting the market and fewer active listings overall, while demand remains roughly the same, you might assume that properties are being snapped up at breakneck speed. In the case of the North Bay in April, that assumption would be wrong though. The average listing is spending a few days longer on the market than it was around this time last year. However, we wouldn’t be surprised to see listings getting snapped up more quickly over the course of the next few months, if the current trends in inventory persist.

Napa remains a buyer's market, whereas Marin, Solano, and Sonoma Counties favor the seller

The real estate market in California has historically averaged around three months' worth of inventory on the market at a given time. This means that whenever inventory levels drop below three months' worth of supply, an area is in a seller’s market. On the flip side, if inventory levels are above three months' worth of supply, an area is in a buyers’ market.

In the month of April, we saw some considerable changes in terms of the number of months' worth of supply on the market. There were 6.2 months of supply on the market in Napa, making it a buyer's market. Whereas there were 2.6 months and 2.2 months of supply on the market in Marin and Solano Counties, respectively, making them seller's markets. Lastly, although Sonoma County saw a considerable swing in inventories, it’s fairly balanced at this point, with 3.1 months of supply on the market.