Monthly report · No.12
MONDAY, MARCH 17, 2025
*Data is sourced from the MLS and considers detached Single-Family Homes
the state of the market
The Housing Factor
By Ehsan Habib
Right on cue, the housing market is picking up steam as we transition into the Spring Market! While there was only a modest 7% Month-over-Month (MoM) increase in the number of new listings to hit the market between January and February, we saw a 44% MoM increase in listings sold in the same period.
For the listings sold in February vs January, we saw another remarkable shift. The sales that closed in January represented a large number of transactions that began in December 2024, and the Average Days on Market (DOM) was 41 days while the Median DOM was 24 days for those sales. The sales that closed in February were largely from newer listings that hit the market after the holiday season: the Average DOM was 28 days and the Median DOM was 14 days for these sales.
We are seeing a pronounced uptick in buyer demand and this is borne out anecdotally in the experience of most of our clients, whether they are buying or selling. Prices are up YoY, and just about every buyer has to compete against other buyers making offers, so the housing market must be hot, right?
There is a less discussed, but steadily growing, segment of home sellers that are not enjoying the multiple, above list price offers that we work hard to get for our sellers. There are more homes actively for sale in our market than at any other point in the past 10 years.
So, where are these homes, and why is the abundance of supply not bringing down prices?
The homes are hiding in plain sight; they are simply the less attractive homes on the market. They could be overpriced. They could be difficult and expensive to insure - the insurance market is more difficult to navigate than ever. They could require significant renovations - renovation costs have risen significantly in recent years for a myriad of reasons. And, of course, some homes are always a challenge to sell - whether it’s an awkward floor plan or problematic neighbors, most buyers would require a significant discount to even consider such homes.
The tension between increased buyer demand and growing supply will eventually resolve. I believe this resolution will be slow to come due to our society’s high levels of wealth disparity and the consequent unevenness in the housing market. High-income buyers and buyers with significant assets (often real estate) are sticking to their preferred neighborhoods. Their demand is slow to spill over to the more affordable neighborhoods. Meanwhile, the average Bay Area resident struggles to make the leap from renting to home ownership.
the podcast is back!
By Declan Spring
The podcast is back! After an almost complete absence in 2024, Let’s Talk, with Declan Spring has rebranded as The Mostly Real Estate Podcast, with Declan Spring. We’re excited to announce the finished construction of a purpose-built studio at our offices on Rose Street in Berkeley, and we are lining up guests and committing to launching a new episode bi-weekly (or more) beginning in March. You can find the first episode of the reboot here.
Mortgage news
MORTGAGE MUSINGS
By Evelyn Freitas | VP of Mortgage Lending at Guaranteed Rate NMLS 247578
Sorting Through The Chaos Just eight weeks into Trump 2.0, chaos is taking hold. Mass layoffs, the dismantling of federal agencies, fluctuating tariffs, and geopolitical tensions have destabilized markets, driving up prices and unemployment. Many are wondering how this will impact real estate and mortgages. Trump’s slash and burn approach to federal agencies and staffing levels have left hundreds of thousands jobless or uncertain about their future. As lawsuits challenge the legality of these layoffs, some employees are returning to offices stripped of furniture, equipment, or internet access [source]. This upheaval affects more than just these workers—public access to essential services, from Social Security to the National Park Service, is also being disrupted.
How does this impact housing? We may see an increase in pressure sales as unemployed homeowners struggle to make mortgage payments. On the other hand, the ongoing “mortgage lockdown” could continue, with homeowners reluctant to sell
properties with lower-rate mortgages, keeping inventory tight. Another possibility is that uncertainty causes some buyers to delay purchases, while others see an opportunity to buy amid the chaos and create a stable home for themselves and their families. Then there are tariffs. Trump’s spastic implementation of promised tariffs has rattled markets, provoked international retaliation, and increased costs across industries. Prices for raw materials and finished goods are rising, putting pressure on both producers and consumers. Food and energy costs are squeezing household budgets, making it harder to save for down payments and reducing overall affordability. Homebuilders are already slowing production due to soaring lumber and material costs. Inflationary pressure could push interest rates up, while unemployment and slow growth could force them down. So far in 2025, mortgage rates have declined slightly, from 7.04% in mid-January to 6.65% in mid-March [source].
In times like these, navigating the mortgage process can feel daunting. How do you make the right decision? Where do you turn for answers? If you’re thinking about buying or selling a home and want help figuring out the financing, let’s talk. You can reach me at evelyn.freitas@rate.com or www.evelynfreitas.com. One thing is certain—we’ll get through this together.
OPINION
By Declan Spring
Trump's FAFO policies are making it impossibly hard on investors, and the consequences of his mafia style approach to governance are showing up most notably in a declining stock market. Inflation concerns are back. Counter intuitively though, mortgage interest rates lowered last week, and it's worth understanding what impacts and informs mortgage rates, because it's not the short-term Fed funds rate that dictates other types of credit (credit card rates, for example).
Conventional 30yr fixed mortgage rates hit their lowest levels in months a couple of weeks ago, with the average lender right in line with levels from mid October or early December. [source] Since September 2024 the Federal Reserve has cut rates by 1% but mortgage rates initially ticked up causing confusion among consumers. Federal Reserve rate cuts do not directly correlate to reduced mortgage interest rates. As more seasoned mortgage rate watchers know, a better way to understand the direction of mortgage rates is to track the yield on the 10-year Treasury bond. The 10-year Treasury bond yield is the interest rate the U.S. government pays to borrow money for a decade, serving as a benchmark for other interest rates and a key indicator of investor sentiment about economic conditions. The 10-year yield is used as a proxy for mortgage rates. As the yield on the 10-year Treasury bond increases, typically so too do mortgage interest rates, and as the the yield on the 10-year Treasury bond declines, mortgage interest rates typically follow the same pattern. Here's a graph tracking the 10 year Treasury bond yield.
What we're experiencing now is a double edged sword. Strong economic uncertainty pushes more investors to favor safe investments like bonds, driving down the overall yield. Mortgage lenders tend to set mortgage rates to the 10-year treasury yield to make mortgage-backed securities appealing to investors. But strong economic uncertainty dampens consumer confidence in everything, including the housing market. Although lower mortgage rates are a welcomed relief, it's problematic if the shift stems from worrying economic factors. [source]
For home buyers, and for those hoping to refinance, it's worth checking in with a mortgage professional to understand any opportunities that this otherwise chaotic period of *leadership* might present.
Since the beginning of last year we’ve made an effort to record video of work in progress to our YouTube channel. It might not make for the world’s greatest TV but we really enjoy making our short movies. Ours is such rewarding work, and it just makes sense to share our “before and after’s” with you! We also had a client reach out to work with us based purely on video they watched on our channel, which was novel experience for us. So, If you know anyone thinking of selling property and you’re looking for a fun and passive way to introduce them to us, perhaps consider sending them a link to our YouTube channel - click here for the link!
We are The Home Factor, REALTORS®, serving clients in the San Francisco Bay Area, and beyond.
Declan Spring · Declan@thehomefactor.com
(415) 446-8591 · DRE#01398898
Denitsa Shopova · Denitsa@thehomefactor.com
(510) 220-1634 · DRE#02137852
Ehsan Habib · Ehsan@thehomefactor.com
(510) 730-4516 · DRE#02166899
GUIDING AND INSPIRING PEOPLE TO INCREASE THEIR FINANCIAL STABILITY AND LOVE OF LIFE THROUGH WELL DESIGNED HOME OWNERSHIP
The Home Factor • DRE#01398898 • Powered by Keller Willams • 2089 Rose St, Berkeley, CA 94709 • Declan@TheHomeFactor.com · (415) 446-8591