Bay Area Market Update | November 2024

Quick Take:

Median prices rose in Silicon Valley and San Francisco, while prices in the North and East Bay declined. Typically, prices contract this time of year, highlighting the outsized effect mortgage rates have on the market.
Total inventory in the Bay Area declined, as sales increased and fewer new listings came to the market. However, we expect inventory to decline and the overall market to slow over the next three months.
Months of Supply Inventory has remained below three months of supply for single-family homes, indicating a sellers’ market, with the exception of Napa and Santa Cruz, which favor buyers.

Note: You can find the charts/graphs for the Local Lowdown at the end of this section.

Median prices rose in Silicon Valley and San Francisco as sales increased

In the Bay Area, home prices haven’t been largely affected by rising mortgage rates after the initial period of price correction from April 2022 to January 2023. Low, but growing, inventory and high demand have more than offset the downward price pressure from higher mortgage rates. Year to date, in October, the median single-family home and condo prices rose across the Bay Area with the exception of single-family homes in Napa, and condos in Marin and Sonoma, which are slightly lower. Year over year, prices increased most significantly for single-family homes in Silicon Valley and San Francisco. Prices typically peak in the summer months, so we expect some minor price contraction through January 2025.

High mortgage rates soften both supply and demand, but home buyers and sellers seemed to tolerate rates near 6% much more than around 7%. Mortgage rates fell significantly from May through September, but rose significantly in October. Now, rates are far closer to 7% than 6%, so we expect sales to slow starting in November.

Sales rose across the Bay Area, while new listings and inventory declined

In most of the Bay Area, the housing market has looked progressively healthier with each passing month of 2024. We’re far enough into the year to know that inventory levels are about as good as we could’ve hoped in the North Bay, East Bay, and Silicon Valley. In 2023, single-family home inventory followed fairly typical seasonal trends, but at significantly depressed levels. Low inventory and fewer new listings slowed the market considerably last year. Even though sales volume this year was similar to last, far more new listings have come to the market, which has allowed inventory to grow. In San Francisco specifically, a significant number of new listings tend to hit the market in January and September in any given year, so new listings aren’t unexpected in September. Sales rose across the Bay Area, but San Francisco sales were particularly notable, up 50% month over month.

Typically, inventory begins to increase in January or February, peaking in July or August before declining once again from the summer months to the winter. It’s looking like 2024 inventory, sales, and new listings will resemble historically seasonal patterns, and at more normal levels than last year. Falling mortgage rates have brought buyers and sellers back to the market during the time of year the market tends to slow significantly. Sales and homes under contract rose in October, which is fairly normal from a historical standpoint. We expect sales to slow over the next three months.

Months of Supply Inventory indicated a sellers’ market in most of the Bay Area

Months of Supply Inventory (MSI) quantifies the supply/demand relationship by measuring how many months it would take for all current homes listed on the market to sell at the current rate of sales. The long-term average MSI is around three months in California, which indicates a balanced market. An MSI lower than three indicates that there are more buyers than sellers on the market (meaning it’s a sellers’ market), while a higher MSI indicates there are more sellers than buyers (meaning it’s a buyers’ market). The Bay Area markets tend to favor sellers, which is reflected in their low MSIs. Currently, MSI is below three months of supply (a sellers’ market) in every Bay Area county, except for single-family homes in Napa and Santa Cruz, which favor buyers.

Local Lowdown Data

As your local real estate experts, it’s our duty to give you all the information you need to better understand our local real estate market. Whether you’re buying or selling, we want to make sure you have the best, most pertinent information. Please don’t hesitate to reach out to us with any questions or concerns. We’re here to support you.