Uncertain Times

What a quarter this has been. I have never experienced so much change (and attempts at change) in my lifetime. Whatever your political leanings, we can agree that there is great uncertainty in the economy. On one hand there are new tariffs, falling consumer confidence, and a softening job market. On the other, a slight reduction in mortgage rates (a 30-year fixed is averaging 6.75% today), good news for buyers.

I spoke with Brady Thomas of LaSalle Mortgage, a leader in the local lending world. He told me that inflation is no longer the buzz word that everyone is talking about. According to Brady, fear is what is driving the market right now. As nervous investors sell stocks and buy bonds for greater safety, interest rates decline, making mortgages a little more affordable. The question that remains is whether the reduction in interest rates is the beginning of an actual recession or not. So, that leaves us with the question: How is the East Bay real estate market* responding to these factors?

The buyers and sellers who were on the fence last year are back in the market. Many of the buyers started the process last year when rates were around 7.5% so today’s rate is an improvement. This has driven up the number of sales by 8% between the first quarter of 2025 compared to one year prior. The median sales price is down 1% during the same timeframe, but this change is not consistent across all East Bay neighborhoods. For instance, we’re seeing a softer market in Montclair, likely driven by increased insurance rates and distance from commercial districts. On the other hand, the median price in Piedmont is up 27% on strong buyer demand.

If you intend to purchase this year, remember that inventory is limited – if you find the right property, you need to go for it because it might be quite some time before another opportunity presents itself. If you are thinking about selling, reach out so that we can craft the ideal strategy to maximize your return.

*detached homes in Albany, Berkeley, El Cerrito, Kensington, Piedmont and Oakland zip codes 94602, 94605, 94608, 94609, 94610, 94611, 94612, 94618, 94619. Based on information from the MLS as of March 31, 2025.