The Fed kept its benchmark rate unchanged; interest rates ticked down below 7%; stock markets remain high (though sometimes volatile); consumer confidence turned a bit unsure about the future. A terrible climate-related disaster rocked the state, with human and financial costs and consequences that will take years to quantify. And for better or worse – you can make your own evaluation – national and international politics have been thoroughly destabilized by new and constantly changing developments, with yet uncertain effects on society, the economy and housing markets.
But in local real estate, 2025 began with the usual new year rebound: The numbers of new listings and of listings going into contract have bounced back from their annual low counts in December, and both are almost certain to rise rapidly as we move further into the year. In the Bay Area, we are already on the cusp of spring, which typically sees the most heated market conditions of the year, and, not unusually, the highest median home sales prices.
“Our outlook for the U.S. economy is positive and offers a promising perspective on the housing market in the year ahead. We expect the U.S. labor market to continue to cool in 2025, which will reduce some of the pressures on inflation. And though we forecast mortgage rates to remain higher for longer, we expect the rate lock-in effect to cool off throughout the year as homeowners adjust to the new normal with respect to rates, therefore adding more inventory to the market.” Freddie Mac Research, 1/28/25
DISCLAIMER: Statistics are generalities, essentially summaries of widely disparate data generated by dozens, hundreds or thousands of unique, individual sales occurring within different time periods. They are best seen not as precise measurements, but as broad, comparative indicators, with reasonable margins of error. Anomalous fluctuations in statistics are not uncommon, especially in smaller, expensive market segments. Last period data should be considered estimates that may change with late-reported data. Different analytics programs sometimes define statistics – such as “active listings,” “days on market,” and “months supply of inventory” – differently: what is most meaningful are not specific calculations but the trends they illustrate. Most listing and sales data derives from the local or regional multi-listing service (MLS) of the area specified in the analysis, but not all listings or sales are reported to MLS and these won’t be reflected in the data. “Homes” signifies real-property, single-household housing units: houses, condos, co-ops, townhouses, duets and TICs (but not mobile homes), as applicable to each market.
City/town names refer specifically to the named cities and towns, unless otherwise delineated. Multi-county metro areas will be specified as such. Data from sources deemed reliable, but may contain errors and subject to revision. All numbers to be considered approximate. Many aspects of value cannot be adequately reflected in median and average statistics: curb appeal, age, condition, amenities, views, lot size, quality of outdoor space, “bonus” rooms, additional parking, quality of location within the neighborhood, and so on. How any of these statistics apply to any particular home is unknown without a specific comparative market analysis.
Median Sales Price is that price at which half the properties sold for more and half for less. It may be affected by seasonality, “unusual” events, or changes in inventory and buying trends, as well as by changes in fair market value. The median sales price for an area will often conceal an enormous variety of sales prices in the underlying individual sales.
Dollar per Square Foot is based upon the home’s interior living space and does not include garages, unfinished attics and basements, rooms built without permit, patios, decks or yards (though all those can add value to a home). These figures are usually derived from appraisals or tax records, but are sometimes unreliable (especially for older homes) or unreported altogether. The calculation can only be made on those home sales that reported square footage.
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Compass is a real estate broker licensed by the State of California, DRE 01527235. Equal Housing Opportunity. This report has been prepared solely for information purposes. The information herein is based on or derived from information generally available to the public and/or from sources believed to be reliable. No representation or warranty can be given with respect to the accuracy or completeness of the information. Compass disclaims any and all liability relating to this report, including without limitation any express or implied representations or warranties for statements contained in, and omissions from, the report. Nothing contained herein is intended to be or should be read as any regulatory, legal, tax, accounting or other advice and Compass does not provide such advice. All opinions are subject to change without notice. Compass makes no representation regarding the accuracy of any statements regarding any references to the laws, statutes or regulations of any state are those of the author(s). Past performance is no guarantee of future results.