Monthly report · No.16
FRIDAY, JULY 25, 2025
the state of the market
The Housing Factor
By Ehsan Habib
*Data is sourced from the MLS and considers detached Single-Family Homes
This month we’re not only looking at monthly changes, but we’re also reviewing the data for the second quarter of the year. Further down in the newsletter there’s more conversation about the state of the Inner East Bay real estate market for the first half of the year.
Let’s start by looking at the chart on the left for Q2 of 2025 vs Q2 of 2024. We can see some notable developments in the Inner East Bay Market. There was a small decrease in new listings (16 fewer new listings in 2025 vs 2024; less than 1% difference) but a 6.7% increase in the amount of listings sold. The median sales price declined by 3.3% - but with 5 of the 11 cities we track actually showing an increase in median sales price compared to 2024.
Looking at just the month of June, these trends are amplified. We saw an 8.6% decrease Year-over-Year (YoY) in the number of new listings brought to market (508 vs 556). Simultaneously, there was a 15.7% increase in the number of listings sold! The median sales price is up 2% in June ‘25 vs June ’24, while the average sale price is up 4.6%.
I don’t generally like to discuss the difference between List Price vs Sales Price as an indicator of demand, as one of our market’s unique features is the widespread practice of aggressively underpricing homes. But as we’ve been collecting our own data for over a year, we can see some trends emerge. In June of 2025 the median home sold for 10.9% over the median list price (vs 12% in 2024). For all of Q2 2025, the median home sold over list price by 12.9% (vs 16.7% in 2024). The median list price between 2024 and 2025 was almost identical, but looking only in the aggregate for cities we track, the median sold price declined by 3.3% vs Q2 2024. I want to note however that each city has its own data. El Cerrito is up 10.4% vs Q2 2024, while Kensington is down 13.7% and yet these neighbors are so intertwined that most people driving in the hills would scarcely know where the borders lie. Note: In Declan’s podcast conversation with Aman Daro (see below) there’s a slightly different take on the East Bay market because Aman’s data set includes Piedmont for example, but does not include San Pablo, Pinole, El Sobrante and Hercules. At The Home Factor we choose to track the East Bay markets where our team is active the most.
The list vs sold price trend, coupled with the fewer listings & more sales phenomenon, demonstrate that our market is getting closer to finding its equilibrium. Sellers are becoming more realistic about what their homes’ market value is, and buyers are snatching up what they like and passing on the rest.
Still, things are far from uniform when we are speaking about such a large area. Homes priced below $500k are, on average, selling below their list price, while homes listed for over a million dollars are performing especially well. If you would like data or advice specific to your neighborhood, please reach out - as ever, the data and counsel we can give needs to be tailored to your specific needs.
Mortgage news
MORTGAGE MUSINGS
By Evelyn Freitas | VP of Mortgage Lending at Guaranteed Rate NMLS 247578
What to Know About Adjustable-Rate Mortgages (ARMs) in Today’s Market
If you’ve been looking into a home purchase lately, you’ve probably noticed that mortgage rates are still a hot topic. With affordability on everyone’s mind, more buyers are giving adjustable-rate mortgages (ARMs) a second look. But what exactly is an ARM, and could it be a smart move for you?
ARMs 101: The Basics
An adjustable-rate mortgage starts off with a lower interest rate than a typical fixed-rate loan. This introductory rate sticks around for a set number of years—usually 5, 7, or 10—before it starts to adjust based on the market. The most common is the 5/1 ARM: your rate is fixed for five years, then adjusts annually.
Why Are People Considering ARMs in 2025?
With fixed rates still on the higher side, ARMs can offer some real savings up front. As of July 2025, ARMs make up about 5% of all outstanding single-family mortgages in the U.S., totaling roughly $550 billion in unpaid principal balance (HousingWire).The prevalence of ARMs varies by loan size: for loans over $1 million, ARMs made up 40% of the dollar volume, while for loans between $200,001 and $400,000, it was about 7%. The popularity of ARMs tends to rise when fixed rates are high, as buyers look for ways to keep monthly payments manageable. For the most current numbers, the Federal Reserve Economic Data (FRED) is a great source of credible information.
What’s the Catch?
After the fixed period, your rate (and payment) will change, and it can go up or down. It’s important to know how much it could change—there are usually caps on how much your rate can increase each year and over the life of the loan. Make sure you’re comfortable with the “what ifs” before you commit.
Is an ARM Right for You?
An ARM might be a good fit if:
You plan to move or refinance before the fixed period ends
You want to maximize your buying power right now
You’re okay with a little uncertainty down the road
Let’s Chat!
Mortgage options can feel confusing, but you don’t have to figure it out on your own. If you’re wondering whether an ARM makes sense for your situation, or if you have other mortgage related questions, I’m here to help! Reach out at evelyn.freitas@rate.com for a chat or a personalized mortgage review. Let’s make sure you have all the info you need to make the best move for your future.
Our Promise: Up To The Minute East Bay Real Estate Data Straight to Your Inbox
By Declan Spring
I’ve been keeping a blog for the past year on our website. I spend hours every week pouring over Inner East Bay real estate market data trying to understand what’s just occured in terms of supply and demand, what’s happening in real time, and what might happen next. Market evolution is my jam! Recently though it occured to me that maybe nobody uses the word blog anymore.....
Feeling every bit my 52 years of age, I take some measure of satisfaction (and relief) in having come to this conclusion myself, before either of my kids could gently pull me over to the corner of the room and let me know that I’m embarrassing them with all of this blog talk.
SUBSTACK
And so, to be better aligned with popular trends, the blog is no longer a blog. I created a Substack! This extremely up to the weekly post will make you the real estate expert at parties with brilliant insights such as the average sold price in the past 2 weeks for single family homes in each of our 3 biggest Inner East Bay cities of Oakland, Berkeley, and Richmond. Please click here to subscribe.
Podcast Episode #61 -
Aman Daro - Decoding the Inner East Bay Housing Market:
A Mid-Year Analysis
By Declan Spring
This week’s podcast, a conversation with Aman Daro, Director of Operations at The Grubb Co., is a deep dive into what the data reveals about the first half of the year in the Inner East Bay real estate market.
The numbers tell a fascinating story of market bifurcation. While homes priced below $500,000 struggle to maintain value (selling 7% below asking on average), properties in the $1-2 million range are thriving at 22% over asking price. Even more striking, the luxury market above $2 million is performing exceptionally well, defying conventional expectations during economic uncertainty. This pattern suggests wealthy buyers may be viewing real estate as an inflation hedge, while entry-level segments face greater challenges.
Geographic variations paint an equally compelling picture. El Cerrito has emerged as the region's hottest market with homes selling 26% over asking price and the lowest months' supply of inventory. Berkeley continues its remarkable stability, now boasting the highest 20-year appreciation rate in the Inner East Bay. Meanwhile, Oakland and Richmond show strong performance in desirable neighborhoods despite higher cancellation rates. The condo market tells a different story, with median prices down 12% year-over-year and significantly longer days on market.
Here’s some additional information about Average % Over List Price for sales in our various cities since it’s a fascinating world unto itself and is the most frequently the most frustrating aspect of the market for consumers: Albany 34%; El Cerrito 26%; Berkeley 22%; Kensington 22%; Oakland 8%; Richmond 1%; El Sobrante, Pinole, San Pablo 0%.
Aman also tackles controversial topics like private listings versus MLS exposure, sharing data that homes sold off-market typically achieve 17% lower prices than those with full market exposure. For both buyers and sellers, this conversation offers invaluable insights into timing strategies, price point considerations, and neighborhood dynamics that could significantly impact your real estate decisions in this unique East Bay market.
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