
Real estate is all about answering three key questions for buyers, sellers, and investors alike: What’s for sale?, How much is my house worth?, and How’s the market?
Understanding these questions in the context of the current market conditions can provide valuable insight into what’s happening in the housing world, especially for 2025.
1. What’s for Sale?
Inventory is one of the primary indicators of market health. Right now, across most of the U.S., inventory tends to dip in January, which is common during the winter months. This seasonal slowdown typically gives way to more listings as spring approaches. By late June, inventory will typically peak, signaling a more competitive market, particularly for buyers.
In the current climate of early 2025, we’re seeing a gradual increase in listings, with sellers beginning to return to the market after the holidays. This uptick in inventory often signals a shift towards a more balanced market, where buyers may have more choices, but the competition can still drive up prices in hot segments.
Unsold Inventory - UP 50% YTD thru 2024, Up 22% Jan 2025 vs. Jan 2024
New Listings Up 29%
2. How Much is My House Worth?
The Median List Price is the best barometer for home values. This price is highly correlated with future sales prices, often leading them by 30-90 days. If you see an upward trend in the median list price today, it’s a good indication that home values will likely follow suit in the coming months. We ecpect to see the home price apprciation curve to bemuch flatter, actually for the 3rd year in a row.
For sellers, the key takeaway is that pricing your home correctly based on recent market trends is crucial. If homes are moving quickly in your neighborhood with multiple offers, it might be time to push your price closer to the higher end of the market.
Median Home Prices - Down 2.5% MTM, Up 9 % YTD, Up 8% Jan 2025 YOY
3. How’s the Market?
When it comes to gauging how the market is performing, Days on Market (DOM) and price fluctuations are critical indicators. Typically, DOM begins to fall towards the end of March, signaling the start of the peak spring buying season. In 2025, homes are still moving relatively quickly, but we’re also seeing some properties sit longer, especially in certain price segments or areas with less demand.
If you’re considering selling, it’s important to monitor the DOM in your specific price range. Higher demand price ranges will see quicker sales, while slower-moving segments might benefit from strategic pricing adjustments.
Additionally, price reductions are a factor to watch—currently, around 30-35% of homes are experiencing price cuts in many markets, suggesting some level of buyer hesitation. Sellers who are pricing too high might need to adjust their expectations.
Median Time on Market - UP 24% MTM, Up 17% YTD
Will Home Prices Fall?
The short answer? Not likely. While mortgage rates are expected to ease, hovering in the mid 6% range, home prices are projected to keep climbing in most areas – just at a much slower, more normal pace. If you average the expert forecasts together, you’ll see prices are expected to go up roughly 3% in 2025; that’s a much more typical and sustainable rise in prices. Buyers, don't expect a sudden drop that’ll score you a killer deal if you’re thinking of buying this year. While that may sound disappointing if you’re hoping prices will come down, refocus on this. It means you won’t have to deal with the steep increases we saw in recent years, and you’ll also likely see any home you do buy go up in value after you get the keys in hand. And that’s actually a good thing.
And if you’re wondering how it’s even possible prices are still rising, here’s your answer. It all comes down to supply and demand. Even though there are more homes for sale now than there were a year ago, it’s still not enough to keep up with all the buyers out there. Prices will rise at a pace similar to that of the second half of 2024 because we don’t expect there to be enough new inventory to meet demand.
Recent Trends for Contra Costa County Dec. 2024: (detached homes over $789,000.)
Home Sales Activity (units) - Down 9% MTM, UP 3% YTD thru 2024, Down 25% Jan 2025 YOY
Keep in mind, though, the housing market is hyper-local. So, this will vary by area. Some markets and neighborhoods will see even higher prices. And some may see prices level off or even dip a little if inventory is up in that area. In most places, though, prices will continue to rise (as they usually do).
Key Takeaways for 2025 Buyers and Sellers:
Buyers: It's a great time to buy if you're equipped with the right data and are patient. Focus on your specific price segment—certain price points are moving faster than others.
Sellers: Pricing your home right, based on current market conditions, is essential. If you’re in a competitive price range, be prepared for quicker sales.
Both: Stay informed about inventory levels, DOM trends, and median list prices in your area to make the most of your decisions.
By keeping these factors in mind, buyers and sellers can better understand their position in the market and make informed decisions as the real estate landscape evolves throughout 2025. If you want to find out what’s happening where you live, I'll be happy to explain the latest trends and what they mean for your plans.
#RealEstateTrendsJanuary2025 #RealEstateInventory #daynasellshomes #daynawilsonrealestateteam #kellerwilliams
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