Market Report: East Bay Home Prices Rise as Inventory Shrinks

Across the East Bay, home prices continued to rise in October year-over-year even though buyers found no interest rate relief.

It's pretty obvious what's fueling the growth in median home sales prices – and it's not that folks have more buying power than they did a year ago. Because they don't, thanks to inflation and the Federal Reserve raising interest rates 10 times in 2022 and 2023.

What's jacking up prices is an inventory shortage.

As you can see in the graphs below, there's a direct correlation – confirming what we've seen first-hand: When fewer homes are listed for sale, competition grows among buyers scrambling to snag one. In most East Bay cities, that means buyers are bidding over the original list prices and outbidding each other.

A few examples:

Alameda - October Sales

Martinez - October Sales

Oakland - October Sales

Walnut Creek - October Sales

Why is Bay Area inventory shrinking?

Why is inventory shrinking? Interest rates, which are at their highest level in 23 years, are the likely culprit. Would-be sellers tell us they're reluctant to give up the low rates they previously locked in on their homes – unless they can sell and then buy a property for an equal or lower price. Perhaps outside the Bay Area...?

Bay Area has 37 of nation’s most posh ZIP codes

Because of the market conditions we just described, it's no surprise that some East Bay cities hold prominent spots on the latest PropertyShark ranking of the Top 100 Most Expensive U.S. Zip Codes in 2023. Contra Costa County has four cities on the list. Alameda County, which made the Top 100 in previous years, has no cities listed this year.