East Bay Real Estate 2025 Year-in-Review: What Happened This Year

As 2025 comes to a close, the East Bay market looks very different from where it stood just a year ago. From shifting mortgage rates to growing inventory and evolving buyer behavior, this year delivered one of the most informative, and stabilizing, market cycles we’ve seen since the pandemic.

“The housing market is finally settling into a healthier state, with buyers and sellers starting to return,” said Zillow Chief Economist Mischa Fisher in December 2025.

Here’s a data-backed look at what happened in 2025 and what it means for East Bay homeowners and buyers heading into 2026.

1. Mortgage Rates: The Story Beneath Every Decision in 2025

If 2025 had a theme, it was this: rates dictated behavior, even more than prices.

Where Rates Actually Landed

• Started 2025 around the high-6% range
• Peaked mid-year above 7%
• Dropped back down to ~6.23% by November 2025

Zillow reported in November 2025 that “the reaction to lower rates shows that buyers are ready to make offers when affordability improves.”

Rates moved more in 2025 than in 2024, causing buyers to enter and exit the market based on affordability windows.

How Rates Influenced Buyer Behavior

• Mini waves of activity followed every dip below 6.5%. When rates eased, tours and offers surged, especially for updated single-family homes in Oakland, Berkeley, Alameda, and Lamorinda.
• Buyers shifted from “rate-focused” to “value-focused.” After two years of waiting, many buyers realized perfect rates weren’t returning anytime soon. The new mindset: If the home fits my long-term life, I'll buy it.

How Rates Influenced Sellers

• Thousands of owners with 2–4% pandemic-era loans stayed put.
• This “rate lock-in effect” reduced potential resale inventory, but not enough to prevent a year-over-year inventory increase.

2. Inventory Finally Rose, But Not Enough to Tip the Market

Inventory in 2025 reached its highest level in two years, with some East Bay submarkets reporting ~30% higher active listings compared to 2024.

A mid-2025 East Bay market report noted “rising inventories, longer days on market, and contrasting trends between single-family homes and condos,” reflecting a shifting landscape.

Why Inventory Increased

• More move-up homeowners decided to sell despite higher rates.
• Empty nesters capitalized on strong pricing in desirable neighborhoods.
• Condo inventory rose sharply as some investors exited the market.

But Supply Still Favored Sellers

• Alameda County single-family supply averaged ~1.9 months.
• Contra Costa hovered near 2–2.5 months.

Economists consider 5–6 months of supply a balanced market, so the East Bay remained clearly in seller territory for most of the year.

But condos told a different story, inventory rose faster, days on market increased, and pricing softened, creating opportunities for first-time buyers and investors.

One East Bay housing analysis stated: “The single-family home market remains a seller’s market, while the condo market remains a buyer’s market.”

3. Did East Bay Home Prices Rise in 2025?

In short: yes, modestly. This was not a runaway appreciation year, but it wasn’t a declining one either.

Alameda County

• Median home price (Oct 2025): $1.115M
• Up ~1.4% year-over-year

Contra Costa County

• Slight price declines early in the year
• Stabilization through summer
• Modest gains in high-demand pockets late in the year

Nationally, FHFA reported that “U.S. single-family home prices increased 4.7% over the prior year despite improving supply,” reinforcing the pattern of steady, resilient price growth.

Compared to 2024’s stagnation, 2025 showed clearer upward momentum, especially for well-prepped, move-in-ready homes.

4. How Sales Activity Compared to 2024

While 2024 suffered from extremely low transaction volume, 2025 saw notable improvement:

• Pending sales increased during rate dips
• Closed sales rose as more inventory became available
• Showings were more consistent month to month

The most defining change? Buyers were more decisive. When the right home appeared, and they could stomach the payment, they acted.

Condo sales lagged behind single-family homes, reinforcing the widening gap between the two product types.

5. What These Numbers Tell Us About Today’s Market

2025 revealed several important truths:

• Buyers prioritize lifestyle over rate timing. People are done waiting for a 3% mortgage.
• Sellers who prepare their homes outperform the market. Pre-list inspections, staging, light cosmetic updates, and landscaping upgrades drove higher sale prices and faster timelines.
• Single-family homes remain the East Bay’s strongest asset class. Especially those with ADUs, modern layouts, outdoor space, and walkable locations.
• Condos represent the best opportunity segment for 2026 buyers. Slow condo absorption is creating value opportunities for first-time buyers, investors, and house hackers.

Zillow’s 2025–2026 outlook echoed this, noting that buyers and sellers are “starting to return” as the market stabilizes and affordability improves.

6. Is the Market Better or Worse Than 2024?

Better, in almost every measurable way.

• Higher inventory
• More transactions
• More stable pricing
• Slight price growth vs. 2024’s near-flatline
• More predictable buyer activity
• More move-up sellers re-entering the market

A December 2025 economic outlook noted that “the housing market will warm up in 2026, with more sales and modest price growth,” reinforcing the idea that 2025 was the turning point.

2024 was “frozen.” 2025 was the “unthawing.” 2026 may be the return of a more normal market cycle.

7. What East Bay Sellers Should Expect in 2026

• More competition from other listings
• Continued strong demand for turnkey homes
• Greater need for strategic pricing
• Buyers asking deeper questions about condition & long-term value
• Condos requiring sharper pricing to sell quickly

For sellers considering a move, early 2026 may offer the strongest leverage before inventory increases in late spring.

8. What East Bay Buyers Should Expect in 2026

• More choices than in 2023–2024
• Better negotiation power on condos
• Competitive conditions for updated single-family homes
• Prices unlikely to fall absent a major economic shock
• Great opportunities during brief rate dips

Final Thoughts

2025 was the year the East Bay market found its footing again. With rates stabilizing, prices edging upward, and inventory slowly unlocking, the real real estate landscape is more balanced and predictable than it has been in years.

As FHFA and multiple national forecasters noted, price growth is moderating but remains positive — a sign of normalization rather than volatility.

For homeowners curious about their current equity, or buyers planning a 2026 move, now is the perfect time to evaluate options, run numbers, and prepare a smart strategy.

If you want a personalized breakdown of your neighborhood or your home’s value trend over the past 12 months, I'm here to help.