Our Q1 2025 Market
The East Bay housing market gained fresh momentum in the first quarter of 2025, fueled by a surge in inventory, strong mid- to high-end sales activity, and continued buyer demand for homes in more desireable spots.
Inventory Rebounds, Unlocking Market Movement
After nearly two years of tight supply, Q1 brought a welcome shift: more homes hitting the market. Active listings increased bringing inventory closer to pre-pandemic norms. Compared to the greater SF Bay Area, our East Bay led the way. Behind this increase? A mixed but generally positive economic backdrop with market volatility, global trade tensions, and interest rate uncertainty. As spring unfolds, buyer confidence has increased particularly in prime neighborhoods.
Sales Activity Climbs—Especially at the Top
Buyers returned in greater numbers this quarter, up 3% from Q1 last year. But sales weren’t evenly distributed. Activity dipped slightly for homes under $1million, where buyers remain sensitive to mortgage rates hovering above 6.75%. In contrast, sales of homes priced in the mid to upper bracket rose 6%, while top-end sales over $3M jumped 10% year-over-year with demand for transit-friendly neighborhoods (homes in the flats) a key priority.
Bidding Wars Return in Prime Areas
Competitive bidding made a strong comeback. Most homes sold above asking in Q1. The average sale-to-list price ratio exceeded 12%, the highest since 2022 and up 2% from last year. Despite market shifts, homes continued to sell quickly. Average time on market lowered just a tad. Properties priced near $1million moved even faster, typically going under contract in less than two weeks. Locally, there appear to be other factors at play. For example, Berkeley listings are becoming increasingly competitive, as they absorb demand from adjacent Oakland. East Bay buyers are assigning a higher premium on the schools, safety, and parks that Berkeley provides. This could apply to many of our outer East Bay communities, like Lafayette or Orinda.
Prices Edge Higher Across the Region
Strong demand and tight timelines translated into rising home values. The East Bay median home price reached $1.8 million, up 11% from Q1 2024.
Looking Ahead: A Resilient Market Faces New Challenges
As we move into spring, the East Bay housing market appears well-positioned, buoyed by rising inventory, steady buyer interest, and a resilient labor market despite political tensions. But economic uncertainty looms. Stock market turbulence and ongoing questions around interest rates could cool momentum—or at least introduce hesitation among buyers. Compared to the last two years, buyers now face a market with more choices and somewhat more stable borrowing conditions. If confidence holds, these dynamics may support finishing a solid spring selling season—and offer fresh opportunities for both buyers and sellers.
Moving forward, it’s hard to tell how things will play out with Trump’s unpredictable policies. On one side, slower economic growth, heightened recession risks, and stock market sell-offs could lead to falling bond yields, pushing mortgage rates down. On the other hand, prolonged inflation and the possibility of the Federal Reserve maintaining higher interest rates could pull mortgage rates up.
No one can time this market perfectly. But historically, the people who win in uncertain moments - when ambiguity is high, benefit the most with real estate held on a 5-10 year timeline. Buyer’s waiting for “the right time” - it might be now. Not because it’s perfect—but because others are hesitating. In some cases, it’s absolutely go-time for sellers. Prime neighborhoods are seeing fierce competition.
-Alex
