Inventory Climbs as Sales and Prices Ease
The East Bay housing market delivered mixed results in May, shaped by continued economic uncertainty and rising borrowing costs. While the overall number of homes for sale remained steady month-over-month, supply fell in certain neighborhoods as buyers zeroed in on desirable locations. Average mortgage rates once again neared 7%, pricing out some buyers—especially those shopping below $1 million. And although equity markets recovered much of the year’s earlier losses, ongoing volatility continued to dampen home buying activity, including all all-cash offers.
Home Sales Hold Near Annual Highs
A total of 458 single-family homes sold in May—a 6% year-over-year decline, but still the highest monthly total so far in 2025. The Inner East Bay saw just a 1% dip in sales compared to last year, while the Outer East Bay experienced a more notable 10% drop.
Much of the slowdown occurred in the $1.25M–$2.5M range, especially in Kensington and Orinda, where both sales and pricing declined. Yet at the upper end, momentum continued to build: May marked the fifth consecutive month of growth in homes sold over $3 million, with most of that strength concentrated in the higher-priced Outer East Bay markets.
Still a Seller’s Market—With Slightly Less Heat
Despite a rise in inventory, most East Bay neighborhoods remain under-supplied relative to buyer demand. While local for-sale inventory is at its highest point since the start of the pandemic, it still pales in comparison to other major metros, where inventory has doubled or even tripled in the last 12 months and homes often linger for months. Here, the story is different: demand continues to outpace supply, especially in sought-after areas and in area where fire risk is less.
In Berkeley and Piedmont, homes are still selling in 2 to 3 weeks, while the East Bay-wide average time on market remained under a month. Though competition cooled slightly, more than half of homes still sold above asking—down from two-thirds last year, but still strong. Sellers who received over-asking offers averaged a 12% premium, and in the Inner East Bay, sale-to-list price ratios averaged an exceptional 22% over.
Outlook: Demand Remains Resilient Despite Headwinds
This spring’s market was shaped by rising rates and global financial uncertainty, yet the fundamentals of East Bay housing seem solid. The average sale price was 2% above one year ago—remarkable given the economic climate.
While international investment and broader macroeconomic pressures may continue to influence the pace of transactions, local demand for single-family homes holds both strength and caution. Buyers are still motivated, especially as more inventory becomes available and pricing stabilizes.
-Alex
