Fall is here, bringing mild weather and renewed real estate activity across the Bay Area. Inventory remains tight but is showing early signs of growth as seller confidence returns. Mortgage rates have eased slightly, while commercial real estate continues to navigate a challenging environment with notable debt maturities ahead. Local closing costs are also shifting due to new and proposed transfer tax measures.
Supply & Pricing
After strong early-year momentum, summer brought a brief slowdown due to uncertainty around the new administration’s policies.
Inventory and new listings rebounded post–Labor Day, signaling pent-up seller demand.
Many buyers are staying active through Q4, taking advantage of lighter work schedules and reduced competition.
Interest Rates
The Fed cut rates by 25 basis points in September amid cooling inflation and slower job growth.
Mortgage rates have settled around 6.3%, with some borrowers securing rates below 6%.
Refinance activity spiked nearly 60% in early September.
Commercial Real Estate (CRE):
CRE faces a “maturity wall” with nearly $1 trillion in loans maturing this year, pressuring office properties most.
Vacancies remain near 20%, but multifamily and retail sectors show stability.
Distressed CRE assets total $116 billion, up 31% year-over-year.
Lower Closing Costs
San Jose’s Measure E threshold increased to $2.3M as of July 2025, with tiered taxes up to 1.5% on sales above $10M.
Santa Cruz voters will consider Measures B and C in November, both aimed at funding affordable housing through new transfer and parcel taxes on higher-value properties.
Takeaway
The Bay Area market remains resilient. Seller motivation is returning, prices are stable, and buyers are adapting to current rate conditions. Those planning to sell early in 2025 may benefit from testing the market before year-end, while long-term fundamentals remain sound.
