January 18-19, 2025

Weekend Open Homes & Market Analysis

The weekly update from The Home Factor Team of Realtors for the weekend of Saturday, January 18, 2025, and Sunday, January 19, 2025.

*The specific cities and districts covered in this market analysis report are Berkeley, Oakland, Piedmont, Albany, Kensington, El Cerrito, Richmond, El Sobrante, Pinole, Hercules, and Crockett. 

We’re  happy to provide a complete list of *all Inner-East Bay open homes for this weekend, please click here.

For Open Homes limited mostly to the Berkeley area, we're happy to share the ‘Ad Review’. The Ad Review is a private Berkeley publication of open homes. It has a pleasant format but is by no means an exhaustive list of open homes in the Inner-East Bay. 

For this week’s Saturday Open Homes ‘Ad Review’ please click here.

For this week’s Sunday Open Homes ‘Ad Review’ please click here. 

Good news! The number of open houses on Sunday, January 19 shows an increase over last week. This is exactly in line with seasonality and with our expectations of the market for this time of year. The past week saw an incremental uptick in the number of available homes. Of the cities we track* however, not all have seen an increase in inventory. El Sobrante (and the 94803 ZIP code), Pinole, and Kensington each have a lower count of available homes than last week. This situation is likely to create extremely strong competition for the slow drip of new inventory as it unfolds. We’re already seeing intense interest in the first new listings in Berkeley of the year, and Albany finally has 3 active listings on the market having gone 4 straight weeks without any available detached home inventory! Needless to say, competition for those listings will likely be extremely intense.   Per normal seasonality, we anticipate that inventory levels will begin to increase incrementally in the following weeks but bigger gains in inventory are not anticipated until the middle of February. Super Bowl Sunday falls on February 9 this year and is recognized by most East Bay realtors as the kick-off to the Spring real estate market, our busiest season.

The distribution of listings in Oakland with an open house on Sunday relative to the Inner East Bay as a whole is at 60% which is slightly lower than the 63% average over the past 2 months.

The final week in December and first week in January each year is generally the low point each calendar year for inventory. There’s an unusual set of dynamics at play in the market: Mortgage rates ticked up after the Fed announced its first rate cut in September, and again following the rate cut in late December. This confuses the market, sidelining some buyers. And of course, we had a divisive election which will take a period of time for the money markets to digest and could cause ongoing volatility in money markets during the transition of power. It will be interesting to watch how the first several weeks of the Trump Presidency will impact money markets. In general however, we don’t anticipate that mortgage rates will fall below 6% in 2025, and if they do it will only serve to heat up the market. 

It’s wise to realize that mortgage interest rates of approx 6.5% are the new normal, but new homeowners can take advantage of falling rates in the coming years by refinancing property. Property values will increase in future years as mortgage interest rates decrease, and homeowners who have increased their equity with regular monthly payments, and who refi down will see their wealth increase. This is precisely how and why homeowners realize substantially greater wealth than renters in the first decade of ownership.

Pro Tip: Reach out to us to learn about, and to discuss homes that are sitting on the market longer than is healthy for their bottom line and where a deal might exist for you. This is a good time of year for deals on property that have not successfully found a buyer within 3 weeks of being on the market. 

Let’s look at the market activity for only single family detached homes in our biggest 3 cities in the Inner East Bay. Oakland, Berkeley, and Richmond. 

Here’s the market activity for Oakland over the past 2 months for single family detached homes, not including condos or townhouses. The 2 month chart is exactly in line with seasonality and our expectations of the market for this time of year. There’s an incremental uptick in the number of available homes, and while property going under contract may appear to be lagging behind, that's just a symptom of new inventory. It will require at least 2 to 3 weeks of data for us to understand if demand at the beginning of the year will be sufficient to meet new supply. Anecdotally, signs so far this year indicate strong demand.

Here’s the market activity for Berkeley over the past 2 months for single family detached homes, not including condos or townhouses. The 2 month chart is exactly in line with seasonality and our expectations of the market for this time of year. There’s an incremental uptick in the number of available homes, and property is getting snatched up quickly as revealed by the uptick in pending home sales. Per the data, and anecdotally, signs so far this year indicate extremely strong demand.

Here’s the market activity for Richmond over the past 2 months for single family detached homes, not including condos or townhouses. The 2 month chart is exactly in line with seasonality and our expectations of the market for this time of year. There’s an incremental uptick in the number of available homes, and while property going under contract may appear to be lagging behind, that's just a symptom of new inventory. It will require at least 2 to 3 weeks of data for us to understand if demand at the beginning of the year will be sufficient to meet new supply. Anecdotally, signs so far this year indicate strong demand.

Days on market for Condos & Townhomes is longer than for Single Family Homes by quite a bit. Please let us know if you’d like more detail on this aspect of the market. It's a great time to shop for a condo or townhouse in almost any part of the Inner East Bay. Most real estate agents will tell you that in a market downturn, condos and townhouses are the last type of property to recover. Single family homes tend historically to recover value more quickly following a market downturn. 

Open Homes for Sunday, January 19: Let’s break it down:

Of the 167 single family residential homes that have an open house, 4% had a price adjustment. The list of price adjusted property is always worth a glance. Many sellers with property languishing on the market toward the end of December opted to cancel their listing rather than adjust the price down. See below for more information on cancelations.  

Of the 76 condos/townhouses that have an open house, 3% had a price adjustment in the past week. The list of price adjusted property is always worth a glance. There continues however to be significant opportunities in the current, weak condo market in most East Bay cities for potential buyers. The average days on market for condos and townhouses in the Inner East Bay is currently at 77 days which is actually an improvement over last week. Understanding the cancellation rate of listings is also important and there’s more on that below. 

Listings canceled from the Multiple Listing Service in the past 7 days:

A total of 31 listings were canceled from the Multiple Listing service in the past 7 days across all price points. The graph shows a significant pop in cancellations for the last ½ of December, especially for single family homes, and is in line with normal seasonality. The rate of cancellations slowed this week as we move slowly out of the Winter market and look toward the Spring. 

Most but not all cancellations are in Oakland. We saw some condo cancellations in Albany in the past week for example. Cancellations reveal that sellers are pulling underperforming listings from the market, if they can afford to, in favor of possibly re-listing them in the Spring, or, in some cases, renting them. The pop at the end of the year is not unusual. Cancellations are also an opportunity for buyers because the sellers may still be open to offers. The list is worth reviewing. Click here for a full list.

A quick word about mortgage rates in general since home mortgage rates have been top of mind for consumers in the past few years: 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.

Pro-tip: It’s worth also considering the impact of elections on the current year and what historic data can tell us about elections' impact on the following calendar year. Click here for our July 2024 Newsletter with a feature on “The Impact Of Elections”.

Just a reminder, there are some truly gorgeous houses out there to visit this weekend. You may also want to share this weekly deep dive with friends or family in the east bay who might appreciate the opportunity to visit the beautiful open homes on offer, or who, better still, might truly appreciate the consistent care and effort The Home Factor takes with interpreting the real estate market data in the east bay each week.

That’s the wrap up for this weekend! Please don’t hesitate to reach out for custom information. We’re always happy to provide it. Best way to reach us is at declan@thehomefactor.com 

Declan Spring is consistently a top production realtor in the East Bay and Berkeley, Albany and Richmond. He is respected by clients and colleagues alike.

Declan Spring is among the best real estate agents and realtors working in the East Bay, Berkeley, Albany, El Cerrito, Richmond, El Sobrante, Kensington, Pinole, Hercules, and Oakland. Time and time again his clients review him with 5 stars and extraordinary compliments. Declan Spring receives most of his business by referral. He does not need to rely on traditional marketing because people are always lining up to work with him through word of mouth and by referral. He’s known as “the realtors realtor” because he gets a lot of referral business from industry professionals. How would you like to work with a realtors realtor? Declan Spring has a stellar industry reputation and consumers are generally not aware that being well known and respected in the agent community and industry is a super power for Declan’s clients.