More Homes, More Jobs, More Momentum
The East Bay’s real estate market kicked off the year with a steady rise in inventory, setting the stage for a more active spring. One of the biggest hurdles in recent months has been the lack of available homes, but January saw a welcome influx of new listings—offering buyers more choices and sellers fresh opportunities.
While home sales held steady year-over-year, the number of homes for sale jumped, signaling increased confidence among sellers. Inventory typically builds ahead of spring, but this January’s increase was particularly striking compared to recent years. The East Bay led the charge, outpacing other Bay Area markets in sales growth. With demand still outpacing supply, this recent uptick in inventory may indicate a shift toward a more balanced market.
As expected, the seasonal slowdown meant sales dipped from December—but not dramatically. High-end sales helped buoy overall numbers, while affordability challenges and mortgage rates continued to weigh on lower price points.
A Market Finding Its Balance
Competition remained strong—especially in sought-after neighborhoods—but buyers had a bit more breathing room in January. Homes lingered slightly longer on the market, and a greater share sold at asking price, a sign of stabilizing conditions. The average time on market edged up to 43 days—longer than last year but still below what’s typical for January.
A shift worth noting: 20% of homes sold around the list price—the highest percentage since 2020—while the share selling above asking dipped to an average of 2% over list, lower than last year. Still, the East Bay outperformed the broader Bay Area, with more homes selling over asking and days on market holding steady or even improving.
Notably, in Piedmont, two homes sold at or above the $7 million mark in January, skewing the data. Excluding these transactions, the average sale price reflects a market where buyers are still willing to pay a premium to live in the East Bay.
Economic Forces at Play
As this economic cycle unfolds, if rates remain higher for longer, the Fed risks eroding the stability it sought to achieve. Since the best way to combat inflation is with increased supply, lowering rates to 5% or 6% would help restore balance. As it stands, rates remain too restrictive to spur the kind of growth and activity many feel is needed.
What’s Ahead?
January reinforced key trends: demand remains high for homes near job centers, schools, and transit, but higher rates continue to keep some buyers on the sidelines. With the Fed now predicting just one rate cut in 2025 (down from two), more buyers may begin adjusting to the new normal and re-enter the market.
The pieces are in place for a strong spring—now it’s just a question of how buyers and sellers play their hands. Stay tuned.
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-Alex
