2025 Year End Market Update

As is typical for this time of year, inventory levels are very low across all Tri-Valley cities, along with overall market activity. As one would expect given the lack of activity, the average number of days on market for active homes has increased significantly in most areas. These conditions will likely persist through January. I expect inventory levels to drop further in January and begin to rebound in February.

We appear to be ending the year with mortgage rates approximately 0.75% lower than at the beginning of the year. The average rate in January was close to 7%, while today’s rates are around 6.25%. Many are expecting to see a similar decline in rates in 2026, potentially bringing them into the mid-5% range. Based on today’s tamer-than-expected inflation report (2.7% Consumer Price Index) and a softening job market, those expectations may prove accurate. If rates return to the low-to-mid-5% range, I believe it would spur increased market activity. It would likely bring many buyers off the sidelines and could also encourage some “rate-locked” sellers to make a move.

If you are planning to make a move in 2026, now is an excellent time to start planning, especially if you will be selling a home that may need some updating. Updated, turnkey homes typically sell much more quickly than those in need of work. Developing a plan and starting updates early can pay dividends when you are ready to sell.