Lower mortgage rates may drive up real estate activity in 2025.

If you’re wondering what’s happening with inventory, prices, and mortgage rates, I have answers. Whether buying or selling, planning your next move is an important time.

Sellers are coming back to the market, but not in large numbers. In 2024, we saw a 15% increase in new listings, but buyers were quick to act. Inventory in Silicon Valley dropped nearly 30% in November alone. Across the Bay Area, inventory is at or near record lows, especially in Silicon Valley. What does this mean? Fewer options for buyers but strong price stability for sellers.

Even with fewer listings, prices remain strong. Home prices are slightly below their summer peaks but still up year to date. In Silicon Valley, single-family homes saw year-over-year price increases: 6.3% in San Mateo County and 6.9% in Santa Clara County. This shows that demand is still high, even with higher mortgage rates.

“The Federal Reserve is expected to lower rates gradually in 2025, potentially bringing rates back into the low sixes.”

The 30-year mortgage rate is close to 7%, a big jump from the low 6% range earlier this year. Rates rose sharply in October, slowing sales, but there’s good news ahead. The Federal Reserve is expected to lower rates gradually in 2025, potentially bringing rates back into the low sixes. While rates won’t drop significantly, buyers and sellers should prepare for increased activity once they do.

If you’re a buyer, now is a great time to act. Winter is quieter, meaning less competition, but inventory is low, so waiting could mean missing out. This is also a good time to list if you’re a seller. There’s less competition with near-record-low inventory, and buyers are motivated, especially for well-priced, move-in-ready homes.

The new year brings exciting opportunities. Lower rates, increased sales, and a tech-driven boom fueled by AI are expected to drive continued price growth. If you’re thinking about buying or selling, let’s connect now to position you for success when the market heats up.

Reach out at 408-596-4490 or email me at Brett@TheRealExperts.com, and let’s create a plan to help you take advantage of this unique moment in the Bay Area real estate market.