Quick Take:
- Median home sale prices bounced back in a big way in April, as the spring selling season kicked into gear with nearly a 1% year-over-year increase.
- Inventory levels continue to climb, with new listings pouring onto the market as sellers look to capitalize on the busier spring months.
- Existing home sales are essentially flat on a year-over-year basis, as rising mortgage rates give buyers a reason to pause.

 
 
Spring has sprung, and so have median sale prices
After several months of relatively flat price action, median home sale prices picked up some serious momentum in April. The median home sold for $417,700 in April, representing a 2.10% month-over-month increase and a 0.89% year-over-year gain. This bounce is especially notable when you consider that the median sale price had been on a downward trend from June of last year all the way through January, when it bottomed out at $395,000. Since then, we've seen three consecutive months of month-over-month increases, which tells us that the spring selling season is bringing some renewed energy to the market. However, it's worth noting that mortgage rates have ticked back up in recent weeks, with the average 30-year rate climbing to 6.46% in April, up from the 6.00% low we saw in March. This uptick in rates pushed the median monthly P&I payment up to $2,115, though this is still 3.07% lower than the $2,182 the median homeowner was paying at this time last year. If rates continue to climb, it could put a ceiling on how much further prices can rise in the near term.

 

New listings are flooding the market as sellers get off the sidelines
As the spring selling season heats up, we're seeing a significant wave of new listings hit the market. In April, there were 477,116 new listings nationwide, representing an 8.70% month-over-month increase and a 1.13% year-over-year increase. This influx of new listings is great news for buyers who have been dealing with limited options for the better part of the past few years. On the inventory side, there are now 1,470,000 homes available for sale, representing a 5.76% month-over-month increase and a 1.38% year-over-year increase. Inventory has been steadily building since its December low of 1,230,000, and we're now approaching the levels we were seeing during the peak of inventory season last summer. If this trend continues through May and June, buyers could find themselves with the most options they've had in quite some time, which would be a welcome shift in a market that has been starved for supply.

 

Existing home sales are holding steady, but buyers remain cautious
Despite the influx of new inventory and three consecutive months of rising prices, existing home sales have remained relatively flat. In April, 4,020,000 homes changed hands, representing just a 0.50% year-over-year increase and a 0.25% month-over-month uptick. While it's encouraging that sales are at least trending in the right direction, the pace of improvement has been glacial, which suggests that many buyers are still sitting on the sidelines. Part of the story here is the recent uptick in mortgage rates. After falling steadily from 6.85% last June to 6.00% in March, rates have bounced back to 6.46%, which may have given some prospective buyers cold feet. If rates stabilize or begin to decline again, we could see existing home sales pick up in a meaningful way as we move into the summer months. For now, though, it seems like buyers are content to wait and watch.

 

When determining whether a market is a buyers' market or a sellers' market, we look to the Months of Supply Inventory (MSI) metric. The state of California has historically averaged around three months of MSI, so any area with at or around three months of MSI is considered a balanced market. Any market that has lower than three months of MSI is considered a seller's market, whereas markets with more than three months of MSI are considered buyers' markets.

 

At the national level, we're seeing the market inch closer to a more balanced state. Inventory continues to build heading into the summer, while existing home sales have been essentially flat, meaning that the available supply is lasting a bit longer than it did at this time last year. However, the recent reversal in mortgage rates adds a layer of uncertainty to the equation. If rates continue to rise, we could see demand soften further, which would push the market toward buyers. On the other hand, if rates settle back down and buyers start to re-engage, the growing inventory could get absorbed quickly, keeping the market tilted in favor of sellers. As always, real estate is a highly localized asset, which is why you should check out what's going on in your local market below in the Local Lowdown!

 

 

 

 

 

 

 

 

 

 

 

The Local Lowdown

Quick Take:
- San Francisco continues to lead the Bay Area with double-digit price appreciation in both single-family homes and condos, while prices across Silicon Valley and the western North Bay are also gaining ground.
- Inventory levels remain well below last year across the entire region, with year-over-year declines ranging from 12% in Silicon Valley to nearly 37% in the North Bay and close to 40% in San Francisco.
- Single-family homes are selling at an incredibly fast clip, with listings in Santa Clara County moving in just 9 days and San Francisco homes routinely selling for more than 20% over asking price.
- The condo market has become a buyer's market in several East Bay and North Bay counties, creating a stark contrast with the fiercely competitive single-family home market.

 
San Francisco shatters records while much of the Bay Area posts steady gains
April brought another month of remarkable price appreciation to San Francisco, with single-family homes climbing 21.43% year-over-year to a median sale price of $2,125,000 and condos surging 18.14% to $1,400,000. These double-digit gains have become the norm in San Francisco, where competition for homes remains at a fever pitch. Across Silicon Valley, prices moved in a positive direction as well, with San Mateo County single-family homes up 2.19% to $2,167,500 and Santa Cruz County posting a 5.29% gain to $1,342,500, while Santa Clara County held perfectly steady at $2,100,000.

 

The North Bay saw encouraging results in Marin and Sonoma Counties, with year-over-year gains of 4.38% and 2.35%, respectively, though Napa and Solano Counties continued to soften. The East Bay experienced modest single-family price declines in both counties, with Alameda County down 2.44% and Contra Costa County down 1.71%. The condo market remains a tale of two worlds, with San Francisco condos commanding premiums of roughly 7% over asking price, while Alameda County condos declined 10.38% and Silicon Valley condos posted declines across the board.
 
 
The Bay Area's persistent inventory shortage is defining the spring market
Despite being in the heart of the spring selling season, inventory levels across the Bay Area remain stubbornly below where they were a year ago. San Francisco continues to experience some of the most severe constraints, with single-family inventory down 36.99% and condo inventory down 39.01%, leaving fewer than 700 homes available for sale in the entire city. The North Bay isn't far behind, with single-family home inventory down 36.98% and condo inventory down 24.57%.

The East Bay has seen single-family inventory decline by 25.23% and condo inventory drop by 14.82%. Silicon Valley rounds out the picture with single-family inventory down 12.03% and condo inventory down 6.47%. The silver lining is that transaction activity remains healthy. North Bay single-family home sales are up 9.01% year-over-year, and April saw nearly as many single-family home sales as new listings in the North Bay, underscoring just how quickly the market is absorbing available supply. Until more sellers decide to list their properties, buyers will continue to face an incredibly competitive landscape.
 
 
 
Single-family homes are selling in days, but the condo market is a mixed bag
The pace of sales for single-family homes across the Bay Area remains exceptional. In Santa Clara County, the average home is selling in just 9 days. San Mateo County homes are moving in 11 days, San Francisco single-family homes in 12 days, and Marin County homes in just 13 days. East Bay listings are closing in 13 days in both Alameda and Contra Costa Counties, while Sonoma and Solano Counties are both clocking in at 26 days. These figures are largely unchanged from a year ago, demonstrating the sustained strength of buyer demand.

The condo market is a more complicated picture. San Francisco condos have seen one of the most dramatic transformations, selling in just 14 days compared to 33 days last April, a 57.58% year-over-year decline. However, Santa Clara County condos are spending 46.67% more time on the market than last year, and San Mateo County condos are up 13.64%. The lone bright spot outside of San Francisco is Santa Cruz County, where condo days on market actually improved by 3.33% compared to last April.

Sellers dominate the single-family market while condo buyers gain leverage
When determining whether a market is a buyers' market or a sellers' market, we look to the Months of Supply Inventory (MSI) metric. The state of California has historically averaged around three months of MSI, so any area with at or around three months of MSI is considered a balanced market. Any market that has lower than three months of MSI is considered a seller's market, whereas markets with more than three months of MSI are considered a buyers' market.

The single-family home market remains firmly in seller's territory across the Bay Area. San Francisco has just 1.1 months of supply, while San Mateo County sits at 1.4 months and Santa Clara County at 1.8 months. Alameda County has 1.8 months, Contra Costa County 2.1 months, Marin County 2.2 months, Solano County 2.6 months, Sonoma County 2.8 months, and Santa Cruz County 2.9 months. Napa County remains the lone outlier at 6 months, though this still represents a 33.33% year-over-year decline. The condo market, however, has shifted decisively in favor of buyers in several areas. Alameda County has 4.3 months of condo supply, Contra Costa County 4.1 months, Santa Cruz County 4.5 months, Santa Clara County 4 months, and Napa County 5.6 months. San Francisco's condo market has bucked this trend entirely, transforming from a buyer's market last April at 4.4 months to a strong seller's market today at just 2.3 months. The growing divide between the single-family and condo markets remains one of the most defining characteristics of the Bay Area heading into the summer months.