Bay Area Housing Market Update — August 2025

The Bay Area housing market is showing two very different stories this August: condos are cooling, while single-family homes remain as competitive as ever. Add in the recent dip in mortgage rates, and buyers have a new window of opportunity to act.

Townhomes & Condos: Cooling Market Momentum

Condo values in the San Francisco metro are down ~2.5% year over year (June 2024–June 2025). Financing hurdles, like Fannie Mae’s “unavailable” condo lists and rising insurance costs, are making closings more complex for buyers using conventional loans.

• DOM (Days on Market): Stretching into the 30s–60s

• Buyer Advantage: More room for negotiation, credits, and contingencies

Single-Family Homes: Still a Seller’s Market

Single-family homes continue to perform strongly with less than 3 months of supply. Many properties are still selling 7–8% over asking when priced right, especially in the $1.3M–$2.8M range.

• Santa Clara & San Mateo: Median prices holding firm

• San Francisco: Slight (~1–2%) dip, but outperforming condos

Buyer Insights

• Be mortgage-ready with clean offers & minimal contingencies

• Target entry-level SFHs in San Francisco (<$1M) and larger Contra Costa homes (> $3M) where DOM is softening

• Expect seller confidence to stay strong in prime brackets—discounts are rare

Mortgage Rate Update — Early August 2025

Big news: mortgage rates fell sharply in early August.

• 30-year fixed: ~6.57% (10-month low)

• Down from ~6.74% just a week earlier

• Boosted by weaker July jobs data and investor demand for the 10-year Treasury

What it means for buyers: On a $3,000/month budget, you now gain ~$20,000 in affordability compared to when rates were near 7%.

Market Impact Summary

Positive Effects:

• More affordability for buyers

• Renewed urgency—expect more activity soon

Persistent Challenges:

•  Limited inventory

•  High home prices

Bottom Line: Think of this as an affordability boost, not a total market shift.

Recommended Buyer Actions

• Lock in your rate now—especially with a float-down option

• Look at condos/townhomes where DOM is longer

• Move fast on single-family homes in competitive counties like Santa Clara, Alameda, and San Mateo

Takeaway: The drop in mortgage rates opens a short-term window for buyers in the Bay Area. Whether you’re aiming for a condo in SF or a single-family home in San Jose, being prepared and acting strategically will make all the difference.