As the Fed continues its rate cuts, inventories remain high...

The Big Story

Quick Take:

Mortgage rates continue to slowly move downwards, as the Federal Reserve continues its rate cuts.
Inventories remain high, as new supply is hitting the market faster than existing homes are being sold.
Last Wednesday, the Fed lowered the federal funds rate by another 25 basis points, bringing the target range to 3.50%-3.75%.

Note: You can find the charts & graphs for the Big Story at the end of the following section.

*National Association of REALTORS® data is released two months behind, so we estimate the most recent month's data when possible and appropriate.

Although they are on the decline, interest rates remain much higher than the inflation rate

Unfortunately, we have yet to see mortgage rates drop below the 6% mark, as the Federal Reserve continues its cutting cycle, after its third consecutive cut to the federal funds rate in December. Although many are hopeful that we will continue to see rate cuts into 2026, the future of the federal funds rate is relatively uncertain. While there’s still roughly a month and a half before the next interest rate decision, CME’s FedWatch tool is predicting roughly a 25% chance that we see another rate cut in January. As we all know, the federal funds rate is the most important factor in the determination of interest rates, so paying attention to what the Fed is doing is pivotal! We’ll likely see an increase in the probability of another rate cut if some of the new/delayed economic data that’s coming out provides a cause for concern.

Inventory levels have remained remarkably steady throughout the entire year

Throughout much of the year, inventories at a national level have remained remarkably steady, with most months hovering near the 1.5 million mark. With that being said, in the month of October, we saw inventory levels at roughly 1,520,000, representing a 10.95% increase on a year-over-year basis. During that same time period, we saw more than 384,000 new homes hit the market, representing an increase of 5.08% on a year-over-year basis. We also saw the median sale price for a home increase by 2.06%, bringing the median home value to $415,200.

The Fed continues to cut rates, as the broader market faces uncertainty

Right now, we’re in the midst of a relatively interesting period of time, economically speaking. During the government shutdown, not only were there very few publicly released economic datapoints, but many offices responsible for collecting data were unable to. This means we’re receiving economic data that has been tremendously delayed. Uncertainty like this, of course, does not bode well with countless entities, like lenders, markets, and most importantly, the Federal Reserve. Since the Fed is so reliant on public data that has been inaccessible/delayed given the government shutdown, it’s hard to tell what they will do next with interest rates. Luckily for homebuyers and sellers alike, we saw another quarter-point cut in December, but overall, it’s unclear whether or not this cut cycle will continue.

However, this is just what we’re seeing at a national level. As we all know, real estate is incredibly localized, so be sure to check out your local lowdown below!

Big Story Data

The Local Lowdown

Quick Take:

The median single-family home in Marin County sold for 10% less than it did just one year ago in November.
Inventories in the North Bay dropped by more than 20% when compared to last month!
Despite the inventory dropoff, listings are spending quite a bit more time on the market than they were last year.

Note: You can find the charts/graphs for the Local Lowdown at the end of this section.

Single-family homes in Marin County are sold for considerably less on a year-over-year basis

Throughout the month of November, most of the single-family market was relatively stable. We saw slight fluctuations in median sale price for single-family homes in Sonoma and Napa Counties, with the former declining in value by 0.99% on a year-over-year basis, and the latter increasing in value by 1.72% on a year-over-year basis. However, we saw much larger swings in Solano and Marin Counties, with median single-family homes selling for 3.50% less on a year-over-year basis in Solano County and 10.03% less in Marin County. As per usual, the condo market was remarkably volatile, with muted moves in median sale prices in Sonoma and Marin Counties, and big swings in Solano and Napa Counties. Solano County condos sold for 32.46% less when compared to last year, while Napa County condos sold for 65.35% more.

Single-family inventory decreased by 29.93% month-over-month

Last month, we saw some steeper-than-usual drop-offs in inventory, which was very interesting, especially considering the elevated levels of inventory that we experienced for the vast majority of 2025. The single-family home market saw a 29.93% month-over-month drop in inventory, which equates to a 20.14% year-over-year drop. The swing in the condo market wasn’t quite as volatile, as inventories dropped by 22.63% month-over-month or 14.04% year-over-year. In both markets, we’re seeing lower inventory levels now than we did last December, so one could assume that we’ll see drastically lower inventories once again once the December data comes out.

The average Napa County condo has been on the market for nearly half a year

Although the headline here is shocking, it’s not exactly an outlier. We saw substantial year-over-year increases in the amount of time listings are spending on the market across the board. Single family homes are spending considerably more time on the market in Sonoma, Solano, and Napa Counties, with 32.50%, 20%, and 71.46% year-over-year increases in days on market, respectively. However, Marin County seems unphased, with the median home spending 31 days on the market in both November 2024 and November 2025. Likewise, Marin County condos are actually spending less time on the market with a year-over-year decrease of 26.83%!

The winter shift toward seller’s markets

When determining whether a market is a buyers’ market or a sellers’ market, we look to the Months of Supply Inventory (MSI) metric. The state of California has historically averaged around three months of MSI, so any area with at or around three months of MSI is considered a balanced market. Any market that has lower than three months of MSI is considered a sellers’ market, whereas markets with more than three months of MSI are considered buyers’ markets.

Throughout the winter, we often see inventories at a low level, as many are too busy with the holidays and visiting family to worry about moving. We saw this shift this month, as both types of homes in all counties experienced month-over-month declines in months of supply, meaning all markets moved back toward a seller’s market. When it comes to the single-family market, there were 2.6, 1.7, 2.4, and 5.6 months of inventory on the market in Sonoma, Marin, Solano, and Napa Counties, respectively. Likewise, we saw the condo market end the month with 3.2, 3, 4.4, and 5.1 months of inventory on the market in Sonoma, Marin, Solano, and Napa Counties, respectively.