This fall, Risabh Kumar spent hours scanning home listings and touring open houses. He and his wife hoped there would be fewer homebuyers searching this time of year, especially with interest rates climbing back up again, but that hasn’t been the case.
“We’re trying to find a sweet spot and felt that, because interest rates are high, we would get lucky and there would be some dampened competition,” said Kumar, 32, who works in marketing at a tech company. “But we’ve made two offers that we were both outbid on.”
Home sale activity in the nine-county Bay Area in November rose 14% for single-family homes and 29.4% for condos from last year, according to recently released data from the California Association of Realtors. Buyers and sellers alike seem to be coming to terms with higher interest rates, which in November hovered around 6.8% for a 30-year-fixed-rate mortgage.
“Even though rates didn’t come down as much as buyers hoped for, it’s a testament to how much demand is out there,” said Jordan Levine, chief economist for the California Association of Realtors.
The median home price in the nine-county Bay Area increased 5.3% to $1.32 million from last November. The median price was $2.19 million in San Mateo County, $1.93 million in Santa Clara County, $1.6 million in San Francisco, $1.29 million in Alameda County and $897,500 in Contra Costa County. In the condo market, sales prices also were up 4% in the Bay Area from last November, reaching a median price of $842,500.
This year’s persistently high interest rates have forced Kumar and his wife to tighten their budget. When confronted with bidding wars, they’ve hesitated to submit ever-higher offers, knowing that an extra $50,000 tacked onto the price could translate to hundreds of dollars more on their monthly mortgage.
“It’s been rough, but hopefully we can find something,” he said.
There are more homes on the market this fall than last. This November, the Bay Area’s unsold inventory was at 2 months, vs. 1.8 months a year ago.
“The increase in supply we’ve seen in new listings and total amount of inventory has helped to facilitate more home sales,” Levine said. “The Bay Area has been leading the charge for the last three months, even though it was hit harder when rates started to go up at the end of 2022.”
Laura Moreno Little, an agent with MGM Real Estate in Sunnyvale, said that most homes on the market are the result of deaths, divorces, or people moving out of the area. Much of the regular home-buying activity that typically fuels the market — people trading out smaller homes for larger ones and vice versa — still remains slow.
“With the interest rates and high home prices, it’s just expensive to move,” Moreno Little said.
Agents say that November home sales may have been boosted by the stock market’s strong performance following President Donald Trump’s election victory.
“Whether you like our incoming president or not, the stock market did see a nice bump up, so people jumped into the market.” said Gina Marciano, an agent with Compass based in Willow Glen. The Bay Area is also home to a number of high-income buyers, who may be motivated to purchase a home when the time is right for them, regardless of where the macroeconomic headwinds are blowing, she said.
Katy Polvorosa, a Redfin agent based in Oakland, agreed.
“Bidding wars are still happening, and if homes are priced right, they’re getting multiple offers,” she said.
Agents expect to see inventory tick higher in January, as the holiday season wraps up and both buyers and sellers get motivated again.
For those looking to take advantage of the lull, the end of December can be a good time for buyers, said Jennifer Jo McCallon, a real estate agent with Sotheby’s International Realty based in Oakland.
“On January 1, everyone set their resolution that they’re going to buy a house in 2025,” she said. “I’m always trying to rally buyers at the end of the year and tell them, ‘This is your moment.’”
Rates could play into their favor, too. Since the end of November, the average rate on the 30-year fixed-rate mortgage has slid from 6.84% to 6.60% as of Thursday, Dec. 12, according to Freddie Mac.
Levine, the economist, said that he expects that 2024 will finish with higher overall sales than in 2023, which saw Bay Area sales sink to their lowest levels since the Great Recession.
“We’re even more optimistic for 2025,” he said.