January 2025 Market Deep Dive

The Local Lowdown

The median single-family home prices fell in December but are still near their record highs with the exception of Marin, which peaked at over $2.2 million back in 2022. We expect prices to contract in January 2025 before rising in the spring and summer months.
Total inventory fell 34.8% month over month, continuing the substantial Q4 decline. We expect inventory to continue to decline in January and the overall market to slow due to lack of supply.
Months of Supply Inventory fell across the North Bay in December, implying a shift that favors sellers. MSI indicated a sellers’ market in Marin, Solano, and Sonoma and a more balanced market in Napa.

The median single-family home price fell slightly month over month, typical for December

Single-family home prices in the North Bay remain near record highs, except in Marin, where prices fell slightly. Despite higher mortgage rates, low but rising inventory and strong demand have kept prices stable. Year over year, prices fell 3% in Marin and 5% in Napa but rose 1% in Solano and 5% in Sonoma. Prices typically peak in summer, with mild declines afterward, and a small contraction is expected in January 2025 before rising in spring and summer. With mortgage rates now closer to 7%, sales are expected to slow further.

Single-family home inventory plummeted in November

The 2024 housing market showed steady improvement until Q4 when inventory dropped over 50%, wiping out gains from earlier in the year. While sales volume was similar to 2023, a higher number of new listings had boosted inventory until the sharp decline in November and December, driven by fewer new listings. In December, home sales were up 17% year over year, but new listings fell 24%. The North Bay market remains highly sensitive to mortgage rates, and rising rates in December likely contributed to buyer and seller hesitation.

Months of Supply Inventory in December 2024 indicates a sellers’ market in Marin, Solano, and Sonoma and a balanced market in Napa

Months of Supply Inventory (MSI) measures how long it would take to sell all current listings at the current sales pace, with three months considered a balanced market in California. MSI trended higher in the North Bay for most of 2024 but dropped in Q4, favoring sellers. Currently, Marin, Solano, and Sonoma reflect a sellers’ market, while Napa remains balanced.

North Bay home prices and year-over-year price changes by county, shown in two charts.