Since the COVID-19 pandemic began nearly five years ago, the number of houses for sale in the Bay Area and across the country has been at historic lows while demand from buyers has been relentless, pushing home prices to record levels.
But new data out this week shows the number of homes for sale in the Bay Area last month started to approach pre-pandemic levels, a sign that buyers could have more options this year.
This was the best January for the number of active listings in the region since 2019, according to numbers from Realtor.com. A total of 4,142 homes were listed across San Francisco, Alameda, Contra Costa, Marin, San Mateo and Santa Clara counties last month, up 23% from a year earlier.
“We’re already in an upswing this year,” said Jordan Levine, chief economist for the California Association of Realtors. “This boost in supply will help to set the housing market up for a better 2025.”
Though supply is ticking up, it still hasn’t increased fast enough to meet demand, which has kept home prices high. The median sales price of a single-family home hit $1.13 million in the nine-county Bay Area in January, up 2.3% from a year ago, according to the new data from the California Association of Realtors. The median sales price was $1.96 million in San Mateo County, $1.84 million in Santa Clara County, $1.43 million in San Francisco, $1.15 million in Alameda County and $785,000 in Contra Costa County.
Prices for condos are also up, hitting a median sale price of $770,000 in the nine-county region, up 2.7% from January 2024.
Carola Ponce is among the homeowners who have decided they can’t wait any longer to sell. In 2019, she bought a 100-year-old home in Oakland’s Laurel District, north of Interstate 580. But last year, she spent nearly $40,000 on repairs. It was enough to convince her to move — now, she’s looking for a new-build condo or townhouse in Oakland that won’t require as much maintenance.
“I have a good interest rate — it’s really hard to give that up,” said Ponce, 50, who works as a freelance user experience designer. “But I feel that now is a good time to buy a property before prices get any higher.”
Agents say that home sales were dulled somewhat in January by higher interest rates. The average rate on a 30-year fixed-rate mortgage crept up to 7.04% in mid-January, the highest level in the last eight months. It’s since come back down to 6.85% this week, according to data from the housing finance giant Freddie Mac.
House-hunter Maggie Mutchler-Brown, 38, put it bluntly.
“It sucks right now,” she said while house-hunting in mid-January. High rates forced her and her partner to shrink their budget, to between $400,000 and $600,000.
Even within that price range, they said they found several options around Emeryville and Oakland. Earlier this month, they put in an offer on a $460,000 newly built condo with two bedrooms and two baths in West Oakland. The only downside is the interest rate on their mortgage, which came in at just under 7%.
“But rates have got to come down in the next few years, and we can always refinance,” Mutchler-Brown said.
Still, it could be a while before that happens. Last month, the Federal Reserve Board decided to put a pause on planned cuts to interest rates. Minutes of their January meeting released earlier this week signal that the pause could be even longer, as the board waits to see “further progress on inflation before making additional adjustments.”
“With inflation numbers rising and the Fed declining to make another interest rate reduction, it appears that buyers and sellers will have to assume that what they are experiencing will not dramatically change during the upcoming spring buying season,” said San Jose-based Re/Max agent Tim Yee.
Still, agents say that they are optimistic that this year’s housing market will be better than 2024’s, which was one of the slowest years in recent memory for home-buying, but still an improvement from 2023, which saw Bay Area home sales sink to their lowest level in 15 years.
In January, existing single-family homes spent an average of 29 days on the market across the greater nine-county Bay Area, similar to last year. They transacted much faster than that in the core counties — 17 days in Alameda County, 12 days in San Mateo County, and just 10 days in Santa Clara County — versus 26 days in Contra Costa County. Condos took longer to sell, spending a median time of 45 days on the market in the nine-county region.
“People are getting used to interest rates where they are,” said Alexis Thompson, an Orinda-based agent with Village Associates.
The Super Bowl typically ushers in the start of the spring home-buying season, which reaches a peak around June. Agents say they expect inventory to keep growing over the next few months.
“It’s prime time for buying and selling,” said Cheyenne Ward, a Berkeley-based agent.