Monthly report · No.22
FRIDAY, JANUARY 30, 2025
The Home Factor Wishes You A Happy And Healthy 2026!!
By Declan Spring
‘The 2026 housing market is said to be shifting toward a gradual normalization, with national mortgage rates expected to settle between 5.9% and 6.4% and home prices projected to rise at a steadier pace of 0.5% to 4%. However, local conditions suggest a much more aggressive environment; we’ve hit the ground running with our first listings of the year amid historic inventory lows in the Inner East Bay, the tightest supply since digital records began in the 90s. This scarcity, paired with rising mortgage applications and an influx of "AI money" hitting our shores, is fueling a heated market. With San Francisco condos moving again and San Francisco rents surging at the fastest pace in the nation, the data points to a high-demand year where personal readiness and strategic timing will be more critical than ever.
Stay Informed with The Home Factor
We are committed to bringing you the most authentic, real-time insights through three distinct channels. Please share this newsletter with anyone looking to navigate the Inner East Bay in 2026!
Monthly Recap: Deep dives into the most useful data in our local Inner East Bay micro-markets.
Weekly Substack: Your source for hyper-local market dynamics and curated lists of the week's best open homes.
The Mostly Real Real Estate Podcast: Hear industry pros talk shop in real time. We have some heavy-hitting episodes "in the can" and ready for release:
Wildfire Resilience: A conversation with Berkeley’s Assistant Fire Chief, Colin Arnold, regarding the rollout and enforcement of Berkeley’s controversial EMBER ordinance (specifically the strict Zone 0 requirements).
ADU Financing: A look at 2026 finance options for Accessory Dwelling Units with Brady Thomas, owner of LaSalle Mortgage.
Looking Ahead
With a mid-term election curveball looming at the end of 2026, the political and economic landscape is bound to get interesting. Whether you're buying, selling, or just curious about your home's equity, we invite you to accompany us for the ride.
*Data is sourced from the MLS and considers detached Single-Family Homes
the state of the market
The Housing Factor
By Ehsan Habib
2025 was a busier year than 2024. A 3.74% increase in new listings led to a 2.56% increase in closed transactions. The median sale price dropped by 2.63%, although it is worth noting that the average sales price actually increased slightly. This irregularity is explained by the fact that the upper end of the market experienced higher competition than the lower end—an outcome that becomes increasingly inevitable as wealth inequality continues to climb year after year. It’s fascinating stuff, but I’ll stick to Inner East Bay real estate trends here 🤐.
*Data is sourced from the MLS and considers detached Single-Family Homes
The Average Days on Market (DOM) increased from 28 days in 2024 to 30 days in 2025, while the Median DOM remained steady at 15 days for both years. The majority of homes were still able to sell quickly—typically after two weekends of open houses, followed by an accepted offer and a pending status. When considering the increase in Average DOM, it’s also important to note that the number of Withdrawn, Expired, or Cancelled listings actually decreased from 1,722 in 2024 to 1,669 in 2025. That represents 3.1% fewer homes that failed to sell.
The Median List Price decreased by 2.2%, and the Average List Price decreased by 0.6%, signaling that sellers have been adjusting their expectations. When we also consider that there were more listings, more sales, fewer cancellations, and overall price declines, we can confidently say that the market has continued to shift toward conditions that are slightly more favorable to buyers.
As always, the usual caveat applies: looking at the table for 2025, it’s clear that each city performs differently. Berkeley prices are up 6%, while El Sobrante prices are down 6%. In addition to these price movements, El Sobrante had 4.3% fewer listings year-over-year (YoY), whereas Berkeley had 10.5% more listings. For any given neighborhood, there is always much more to discuss, so for data specific to your city or neighborhood, or any insights and strategies specific to your situation, please reach out to either myself or Declan directly. We both regularly log data directly from the MLS, and we don’t know anyone else who takes the time to study the market so thoroughly.
All else being equal, I would expect 2026 to match 2025: more inventory and more sales. Some neighborhoods will continue to see price growth and the “softer” neighborhoods may have finally bottomed out and begin to rise again.
Mortgage news
MORTGAGE MUSINGS
By Evelyn Freitas | VP of Mortgage Lending at Guaranteed Rate NMLS 247578
A New Year’s Look at the Bay Area Mortgage Market, and The Dream For All Program Is BACK!!
The start of 2026 is bringing a noticeable shift in the Bay Area mortgage landscape. After several years of volatility, interest rates have settled below long-term historical averages, creating renewed momentum among buyers who had been waiting for the right conditions to re-enter the market.
To put this in perspective, the historical average rate on a 30-year fixed mortgage is 7.7% over the last several decades. Today’s rates, sitting in the low-6% range, are meaningfully below that benchmark — and that difference has a real impact on monthly payments and purchasing power. As a result, purchase mortgage applications have risen, signaling growing buyer confidence and increased activity in mortgage financing.
We’re also seeing refinance conversations begin to return. Homeowners are reassessing opportunities to improve cash flow, consolidate debt, or restructure existing loans to support upcoming goals. While rates are not at record lows, they are favorable relative to historic rates, and that matters when planning both short-term moves and long-term financial strategy.
Inventory across the Inner East Bay remains relatively tight, which makes mortgage readiness more important than ever. In today’s environment, sellers are focused on certainty. Offers backed by strong, fully reviewed loan approvals consistently rise to the top. Buyers who understand their numbers — and their options — before writing an offer are far better positioned to succeed.
One of the most significant opportunities for buyers in 2026 is the return of California’s Dream For All shared appreciation program. The portal will open briefly on February 24th, and participation requires an underwritten mortgage pre-approval, not a basic pre-qualification. In addition, at least one borrower must be a first-generation homebuyer, meaning neither borrower’s parents own a home in the U.S.
This is not a program to approach at the last minute. Income, assets, credit, household eligibility, and loan structure all need to be reviewed well in advance. Buyers who wait until the portal opens will likely miss the opportunity.
Here’s what makes early 2026 a strong moment to engage on the mortgage side:
Rates are below long-term averages, supporting stronger purchasing power and smarter loan structuring.
Prepared buyers win contracts, especially in low-inventory East Bay neighborhoods.
Dream For All requires early action, with eligibility and pre-approval completed before February 24th.
If buying in 2026 is on your radar — or if you want to explore whether Dream For All could be a fit — now is the time to start the conversation. Reach out to me at Evelyn.Freitas@rate.com to get pre-approved, review your options, or learn more about Dream For All eligibility.
Create Harmony In Your Home
By Denitsa Shopova
Why Feng Shui Coupled With My Personalized, Custom Home Styling is Your Secret Real Estate Advantage
Whether you are preparing to list your home or you’ve just received the keys to a new one, the "vibe" of a space isn't just an abstract feeling. It’s the result of how energy, or Qi, flows through your environment. That is why I am proud to offer Feng Shui Consultations as well as simple Custom Home Styling Consultations as a core part of my real estate services.
The Benefits of an Aligned Home
Feng Shui is the ancient art of arranging your living space to create balance with the natural world. When your home is aligned, the benefits ripple into every area of your life.
Reduced Stress: Simple shifts in furniture placement can transform a chaotic room into a sanctuary of calm.
Enhanced Prosperity: By activating specific areas of your home (the "Wealth Corner"), you invite abundance and career growth.
Better Sleep & Health: Optimizing the bedroom layout can improve rest and physical vitality.
Faster Sales: For sellers, a home with good flow feels "right" to buyers the moment they walk in, often leading to quicker and higher offers.
Why "Gift" Yourself a Consultation This Year?
We often spend thousands on renovations and decor, but we rarely invest in the energy of the home or a simple decluttering of space and rebalance of objects already present. Gifting yourself a Feng Shui consultation is an act of self-care. It’s about ensuring that your most significant financial investment, your home, is also your most significant emotional support system.
"A house is made of walls and beams; a home is built with love and dreams. Feng Shui ensures those dreams have the room to grow."
Ready to bring more balance to your space? I’m currently offering a New Year Harmony Session for my clients. Reach out to me today at denitsa@thehomefactor.com to book a no obligation discovery call! Wishing you a New Year that’s in balance.
SUBSTACK: WHY our monthly newsletter isn’t enough
By Declan Spring
Think you’re “in the know” from our monthly recap? Think again. Real estate markets move fast, and a once-a-month snapshot can’t keep up.
That’s where our Weekly Substack comes in — it’s your early-warning system, unpacking fresh inventory data, interest-rate shifts, neighborhood trends, and hidden opportunities well before the headlines catch up.
Every issue delivers:
Local open-house & listing insights
Real-time rate analysis
Tactical tips for buyers, sellers, and refinancers
Market signals you won’t see anywhere else
Make your decisions with confidence — not hindsight.
👉 Click here to subscribe to our weekly Substack now and stay one step ahead.
THE HOME FACTOR ON YOUTUBE!
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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