North Bay Market

The Big Story

Quick Take:

Although affordability has been improving over the past few months, monthly P&I payments are still quite a bit higher than they were last year.
Despite political moves that some believe were designed to bring down interest rates, mortgage rates remain high, as the lending market prices in future uncertainty.
On a national level, inventories are increasing at a very rapid rate, while the number of homes sold has declined.
Over the past couple of months, the macroeconomic environment has been incredibly unpredictable, a trend which looks like it will continue over the coming months.

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.

Growth in median monthly P&I payments continues to outstrip inflation

For quite some time, we’ve seen monthly inflation readouts with figures in the 2-3% range. Despite the fact that inflation seems to be under wraps for now, the median monthly P&I payment has grown faster than inflation, with the most reading coming in at $2,113, representing a 3.94% increase on a year-over-year basis. This shows that there are still inflationary pressures at work in the housing market.

Factors contributing to this inflation will vary by market. Some markets have more of an issue on the supply side (i.e. higher construction/materials costs), while others have an issue with the demand side (i.e. more demand for homes than supply). It will be especially important to pay attention to this metric over the coming months to get a gauge of how inflation is impacting the housing market.

Mortgage rates remain high, despite looming economic uncertainty

Mortgage rates have remained high, in the mid to high-6% range for quite some time. Some believe that the recent trade war was being implemented in part to bring down interest rates. However, judging by recent commentary from the Fed, the trade war and the associated uncertainty, has only made Fed officials more cautious in utilizing the incredibly powerful economic tool that is the federal funds rate.

This means that we are probably going to see elevated mortgage rates for the foreseeable future, unless the economy takes a considerable turn for the worse. It is worth noting though, that according to the Fed’s “Dot Plot”, the majority of Federal Reserve officials predict the federal funds rate will be in the 3.75-4.00% range by the end of the year, and the 3.25-3.50% range in 2026.

Inventories continue to build across the country

The moves in sales and inventory that we’ve been seeing throughout California over the past few months have been echoed on a national scale. The nation as a whole has seen inventories build, as homes sit on the market for longer. Our most recent data point (April 2025), shows that inventory increased by 20.83% on a year-over-year basis, to 1,450,000. Meanwhile, existing home sales decreased by 3.38%, to 4,000,000.

Despite the growing backlog of inventory, median sale prices are still trending upward, with the median listing selling for $414,000, representing a 1.82% year-over-year increase. To add fuel to the fire, we’ve seen growing numbers of listings hitting the market, with the number of new listings hitting the market increasing by 7.19% on a year-over-year basis.

Ultimately though, this is just what we’re seeing at a national level. As we all know, real estate is an incredibly localized industry, so knowing what’s going on in your own market is pivotal. Below is our local lowdown, that outlines everything you need to know about what’s happening around you in your neighborhood and surrounding areas!

Big Story Data

The Local Lowdown

Quick Take:

Median sale prices continue to decline throughout most of the North Bay, with the exception of Marin County.
We saw a steep decline in the amount of inventory on the market, with total for-sale single-family home listings dropping by 10.74%, compared to May 2024.
Despite this drop in inventory, listings are still staying on the market for slightly longer than they were last year.

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

Median sale prices decline throughout most of the North Bay

Last month, we saw the median sale price of single-family homes drop throughout most of the North Bay. While Marin County was the only area that saw an increase (2.72%), Napa County sale prices took a huge hit, declining by 12.03% when compared to this time last year. Solano and Sonoma counties saw more modest declines in median sale prices, with values dropping by 2.93% and 2.52%, respectively. Median sale prices in the condo market also fell during the month of May, with Sonoma, Marin, and Solano counties seeing 2.84%, 6.67%, and 3.79% declines on a year-over-year basis.

North Bay inventories see a sharp decline

Last month, we saw a marked decrease in the amount of available inventory on the market. The number of active single-family home listings decreased by 10.74% on a year-over-year basis. However, the number of condo listings increased slightly, by just 1.46%. Although we saw an increase in the number of condos, there's less total inventory on the market right now than around this time last year. This can largely be attributed to the fact that there are fewer listings hitting the market, with new condo and single-family home listings decreasing by roughly 30% on a year-over-year basis. We also saw 4.89% fewer single-family homes sold in the month of May when compared to last year.

Listings are spending more and more time on the market

Yet again, we saw the average amount of time a listing is spending on the market tick up. On a year-over-year basis, single-family homes are spending 5 more days on the market in Sonoma County, and 2 more days on the market in Marin, Solano, and Napa Counties. Although we saw a sharp decrease in the amount of available inventory, listings still seem to be sitting on the market, which is an interesting phenomenon. However, if the inventory issues that we’re seeing now happen to persist, don’t be surprised if we start to see listings getting bought up a bit faster!

Solano County is the only seller’s market left standing

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.

With 2.5 months’ worth of inventory on the market, Solano County is the only area that’s still a sellers’ market within the North Bay. Marin is quite balanced, with exactly 3 months of inventory on the market. On the other hand, Sonoma and Napa Counties are buyers markets, with 3.5 and 7 months of supply on the market, respectively. Napa County in particular may present some particularly interesting buying opportunities for those who are in the market for a new home in that area!