According to Sfgate.com, while headlines across the U.S. highlight a cooling housing market, California is telling a different story — especially in key metro areas like the Bay Area and Silicon Valley.
Across much of the country, real estate experts are raising concerns about declining home sales and affordability issues as mortgage rates hover near 7%. Yet in California, the market remains surprisingly resilient. In fact, some regions are even outperforming expectations.
Bay Area Bucking National Trends
Spring is typically the busiest season for homebuying. But this year, uncertainty around the economy, stock market volatility, and global trade have tempered activity across many states. Not so in the Bay Area.
According to recent data from Compass, areas like the South Bay are experiencing record-high luxury home sales. Homes priced at $5 million and above reached peak pandemic-era levels in Q2 2025.
What’s driving this strength? Experts point to the ongoing tech and AI boom — especially in Silicon Valley — as well as the deep concentration of wealth in the region. Many luxury buyers in this market are less impacted by interest rates and are transacting in cash or large down payments.
San Francisco Shows Signs of Momentum
San Francisco, which has faced headwinds in recent years — particularly in the condo sector — also saw encouraging signs. Median home prices rose 8% quarter-over-quarter and were up 3.5% compared to Q2 2024. Even the condo market, which had lagged since 2020, rebounded with a 10% year-over-year increase.
“The Bay Area remains one of the most affluent, educated, and dynamic regions in the world,” says Patrick Carlisle, chief market analyst at Compass. “It’s not surprising the real estate market here continues to show resilience.”
California: Still a High-Demand Market
Statewide, the picture is a little more nuanced. Home sales are relatively flat compared to last year, according to the California Association of Realtors. However, inventory is rising modestly. The average number of days a home spends on the market has climbed by 33%, and unsold inventory has grown to 3.8 months of supply — still well below the six-month benchmark that typically signals a buyer’s market.
Jordan Levine, chief economist for the California Association of Realtors, cautions that while inventory has risen slightly, it’s not nearly enough to ease home prices. “California continues to face a fundamental supply-demand imbalance,” Levine notes. “There’s simply more buyers than there are homes available.”
National Market: Facing More Challenges
In contrast, much of the country is seeing a decline in sales activity. Recent data from the National Association of Realtors shows that home sales dipped in the Northeast, Midwest, and South. The Western region — including California — showed modest gains, suggesting the state is still on a different path.
Still, some economists are watching national trends with concern. Moody’s Analytics’ chief economist recently sounded a warning, stating that unless mortgage rates drop significantly, the broader U.S. market could face further declines in sales and price growth.
Even so, California may remain insulated due to its strong job market, desirable lifestyle, and enduring demand in key metros.
What This Means for Buyers and Sellers
For sellers in California, especially in high-demand areas like the Bay Area and South Bay, the market remains favorable — particularly in the luxury segment. Homes priced well and marketed effectively are still attracting attention, often with multiple offers.
For buyers, the increased inventory may offer a bit more breathing room, but competition remains strong in desirable zip codes. While mortgage rates remain a hurdle, some buyers are finding creative ways to structure financing — and many are watching for the right opportunity rather than sitting on the sidelines.
Final Thoughts
California continues to show remarkable resilience amid national housing market uncertainty. As always, real estate is hyper-local — and understanding your specific market is key. Whether you're buying, selling, or simply weighing your options, staying informed and working with Marks Realty Group can make all the difference.
Source: Sfgate.com
