A Cooler Summer, A Cooler Market

Just as summer temperatures ran cooler than usual, the East Bay housing market also softened in July. Macroeconomic headwinds—higher mortgage rates, tech-sector uncertainty, and broader national slowdowns—tempered activity. Yet demand remained strong for homes in prime neighborhoods.

The labor market showed mixed signals: while the Bay Area unemployment rate ticked up slightly, it remains tighter than historical averages. Locally, job growth in healthcare, education, and government offset layoffs in tech, helping to steady demand for East Bay housing.

Inventory Holds Steady

After last year’s sharp climb in new listings, inventory has leveled off. Across the East Bay available inventory is up nearly 25% from a year earlier. Whereas in San Francisco, inventory contracted, East Bay markets carried more balanced supply, giving buyers a wider set of options without fully tipping the scale in their favor.

Sales Slow, but Context Matters

420 homes closed escrow in July, up about 8% year-over-year despite greater inventory. Economic jitters and higher borrowing costs were clear factors, yet the East Bay continues to outperform many peer markets nationally. Compared to regions such as Los Angeles, Austin, and Miami— sales in these cities declined considerably.

Sales trends diverged by price point. Activity slowed most in the $1.5M–$3M range, which historically accounts for the bulk of East Bay transactions. At the same time, the top tier remained resilient: homes priced above $3M saw steady or even increased demand, particularly in enclaves like Piedmont, Lafayette, and Orinda.

Competition Depends on Location

The market continues to be defined by location. Homes near transit lines and urban amenities often attracted multiple offers, while more peripheral or car-dependent neighborhoods saw a slower pace.

• Homes of the Inner East Bay sold on average 11% over the list price while the Outer East Bay sold on average 2% less than the list price.

• The typical home spent 30 days on the market—five days longer than last year

• In top-tier neighborhoods such as Rockridge, Elmwood, and North Berkeley, bidding wars remained the norm, while Oakland's more urban spots continued to take longer to sell.

Ahead of Us

As summer winds down, seasonal patterns suggest a slower fall market. The key variable remains interest rates: if the Federal Reserve follows through with a rate cut in September, mortgage costs could ease, bringing some buyers off the sidelines.

Meanwhile, venture capital inflows and renewed IPO activity in the Bay Area may provide another lift, especially in upper-end segments of the East Bay market. Even with economic uncertainty, the buyer pool here remains deep, and East Bay fundamentals—quality schools, transit access, and lifestyle appeal—continue to anchor long-term demand.

-Alex