Monthly report · No.24
FRIDAY, MARCH 27, 2025
Low Inventory Appears To Be
A Feature, Not A Bug
By Declan Spring
The extraordinary decline in inventory year-over-year appears to be a feature of the 2026 market, not a bug. As we approach the April–May window when listings typically begin to rise, we’re seeing the opposite. Active inventory remains constrained, with no clear sign of near-term relief. Unless a meaningful number of homes are quietly being prepared for market, this shortage looks set to persist.
All of this is unfolding against an unsettled macro backdrop. Conflict in the Middle East is contributing to higher energy prices, adding inflationary pressure and keeping mortgage rates elevated. Bond market volatility continues to feed directly into housing.
Locally, however, a different dynamic is at play. Exceptionally low inventory is being met with exceptionally strong demand. The East Bay continues to benefit from proximity to major employment centers, and AI-driven wealth is sustaining a pool of well-capitalized buyers. That demand is proving relatively insensitive to current rate levels, effectively placing a floor under prices. One force is pushing against affordability. The other is constraining supply. For now, they’re holding the market in balance.
If you’ve not been following my Substack lately, I’ve written a couple of deeper dives that might be useful to you or someone you know. They are somewhat related:
The $180,000 House That Became a $2.4M Tax Problem
A real-world look at how capital gains can build over time and the planning mistakes that can turn appreciation into a major tax hit.
Why Can’t I 1031 Exchange My Home?
A clear explanation of why primary residences don’t qualify for 1031 exchanges and what strategies actually do work.
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.
Thinking about buying or selling in the East Bay?
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
*Data is sourced from the MLS and considers detached Single-Family Homes
the state of the market
The Housing Factor
By Ehsan Habib
Inventory remains tightly constrained. We had 431 New Listings across the Inner East Bay this February. Contrasted with the 544 New Listings we had in February 2025, that is a 21% decrease Year-over-Year (YoY). We had nearly the same level of Sold Listings (258 this year vs 274 in 2025), and the result is a Real Estate market that feels markedly different from last year. Attractive homes are seeing fierce competition, and some neighborhoods are obtaining sales prices that are more in line with 2022 comps than 2025 comps (meaning, higher sales prices). While the median sale price is flat compared to Feb 2025, the Average Sold Price is up by 3.7%.
Of the 11 cities surveyed, only 2 had more new listings in Feb 2026 vs Feb 2025 - Albany had 2, and Berkeley had 4 more listings YoY. Hercules had a particularly large decrease and lots of previously overlooked inventory is being snatched up as a result. Oakland had 31% fewer new listings YoY, but a 1% increase in listings sold. Richmond had 30% fewer new listings, coupled with 18% fewer listings sold. The lack of inventory forces Buyers to compete with one another and benefits Sellers. For the region as a whole, the Months’ Supply of Inventory (houses sold vs houses for sale) has increased significantly YoY - from 2.6 Months of Supply to 2.1 Months of Supply.
February was the last month of 2026 when the average 30-Year Fixed Mortgage Rate was under 6%. The US launched another war on Feb 28th, and amongst the devastating consequences, the disruption to the oil & natural gas supply chain has led to a sharp rise in mortgage rates. Reminder: mortgage rates are set by the 10 Year Treasure Bond market, not the Fed. Increased energy prices have raised inflationary concerns, driving up the 10-Year Treasure Yield. As the yields of those bonds increase, so do mortgage rates.
The data we see for March in 2026 should look strong, given the lag between the data and present conditions; homes that went into contract throughout February will close in March. Anecdotally, we have continued to see strong buyer demand for housing throughout this March. The Bay Area often moves in a contrary direction from national headlines. As we’ve commented on in the past, the “upper tiers” of our local housing market boom, and are hardly slowed down by the economic conditions that cause the more affordable areas to struggle.
Mortgage news
MORTGAGE MUSINGS
By Evelyn Freitas | VP of Mortgage Lending at Guaranteed Rate NMLS 247578
Do Not Let the Headlines Determine Your Future: Now Is Still a Smart Time to Buy
If you’ve been watching mortgage rates lately and feeling a little whiplash, you’re not alone — and you deserve a straight answer about what’s actually going on.
Last week, bond markets sold off, driving mortgage rates upward. This selloff wasn’t driven by housing data or a weakening economy. It was driven by escalating war in the Middle East, which pushed oil prices higher and revived inflation fears. In other words, the headlines spooked the markets, rather than the fundamentals. At the same time, the headlines tell of real conflicts and real damage to infrastructure that may take years to rebuild, further affecting oil production and prices over the long term. The good news is that rates are still well below historic averages, and are generally still in the mid-6% range.
The Federal Reserve held its benchmark rate steady last week, which was widely expected. Energy prices are causing the Fed to change their message from signaling rate cuts later this year to hinting at a possible rate increase. Fed officials are being patient and watching energy prices carefully before making a move.
Here’s the bigger picture that often gets lost in the noise: waiting for the “perfect” rate rarely pays off. Buyers who sat on the sidelines last year hoping for dramatic cuts watched home values continue to climb in many markets. The best time to buy is when you are financially ready and when the right home is available — not when the bond market has a calm week.
The buyers who win are the ones who get pre-approved, understand their options, and are ready to move when opportunity appears. Rates that seem high today may be lowered with a refinance tomorrow, but equity missed today cannot be recaptured later.
If you’re curious about what today’s rates mean for your specific budget — or you just want a clear, honest conversation about whether now is the right time for you — reach out to me at evelyn.freitas@rate.com. I’ll cut through the noise and give you the information that applies specifically to you. That’s what I’m here for.
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.
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!
Our YouTube channel offers short, real-world videos showing how we transform and market the older homes we represent. Subscribe—and feel free to share it with anyone considering a sale who wants to see how we guide older homes into newer hands.
👉 Click here to subscribe to our YouTube Channel for some behind the scenes magic..
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