Market Pulse December 2024: Ringing in the new year with new real estate opportunities and challenges

Almost time to get out the champagne glasses and noisemakers to toast another new year. As we ring in the 2025 real estate market, there will be interesting opportunities and challenges.

The Federal Reserve cut interest rates by another quarter percent, though Inman News points out that mortgage rates are still high due to 2025 inflation worries.

NAR Chief Economist Lawrence Yun points out, "Despite the short-term cuts to interest rates by the Federal Reserve, mortgage rates have largely refused to budge. One reason is that consumer price inflation has not been fully contained and slightly accelerated in the last two months…More Fed rate cuts are likely in 2025.”

Nationally, it is unclear how new policies from the incoming administration will affect overall inflation. Opportunities may come from likely tax breaks that could benefit real estate investment, while other policies like tariffs might conversely affect things like home construction and renovations.

In the Bay Area, real estate is still among the priciest in the country and activity is picking back up. AI innovators are flocking from all over the world to sign new office leases in San Francisco, and new medical tenants have signed new leases in Oakland in the wake of Kaiser’s recently announced HQ downsizing.

As we ring in the new year, Bay Area home buyers will face challenging rates and affordability. However, there’s a reason to raise a glass: an uptick in inventory. Life events and a growing recognition that the era of low rates is behind us will encourage more sellers to bring their homes to market in 2025.

Sources: Inman News, Realtor.com, NAR, SF Standard, SFBT

East Bay Market Snapshots: Single family homes, condos, and townhomes as of December 2024

Here is the latest market data from around the East Bay for single-family homes, condos, and townhomes available as of December 2024.

Alameda County - Single Family Homes

Alameda County - Condos & Townhomes

Contra Costa County - Single-Family Homes

Contra Costa County - Condos & Townhomes

Sources: Bay East Association of Realtors and Contra Costa Association of Realtors.

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