The Local Lowdown: February 2025

Michelle Kim | February 28, 2025

The Local Lowdown

Quick Take:

Median sale prices in the North Bay continue to stay roughly in line with the three year average, suggesting that the market continues to be incredibly strong.
Inventory continues to be an issue in the single family home market, as we saw a 16.55% decrease in active listings in the month of January.
Listings are staying on the market for longer, with single-family homes in Marin County experiencing a 34% year-over-year increase in the number of days on the market, and condos in Napa experiencing a 198% increase year-over-year.

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

The North Bay continues to be a very strong market

Although 2024 was definitely the year of uncertainty, as interest rates weighed on buyers and sellers alike, the North Bay retained a tremendous amount of strength, especially considering the environment we are in. Pricing in Sonoma and Solano Counties was the strongest in January, with these counties experiencing 1.80% and 1.65% decreases in year-over-year median sales prices. On the flip side, Marin and Napa Counties experienced 6.69% and 10.20% decreases in median sales price, respectively. However, this wasn’t very shocking, as this was just the market giving back some of the explosive growth that we saw during the first half of the year in these markets.

Single-family home inventories continue to present an issue in the North Bay

Inventory levels are typically a leading indicator for pricing trends in the housing market, and pretty much any other market in the business world. After all, the housing market is subject to the simple law of supply and demand.

With that being said, we saw a precipitous drop in the number of active listings for single-family homes in the North Bay in January, with for sale listings decreasing by a whopping 16.55% on a year-over-year basis. Typically in the winter and early spring months, we see inventory start to replenish itself, so it will be important to pay attention to where this trend goes over time.

If we don’t see inventory levels start to increase in the North Bay over the coming months, there’s a good chance we’ll see another great year in terms of appreciation of home values. However, it’s too early in the year to make a definitive call!

Napa remains a buyer-dominated market

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.

The trends that we’ve seen over the past couple of months remain true. Sonoma, Marin, and Solano Counties continue to be sellers’ markets, with 2, 1.2, and 2.1 months worth of inventory, respectively. Whereas Napa County continues to be a buyers’ market, with 3.8 months worth of inventory.

Looking Ahead

With inventory levels as low as they are, and pricing remaining strong throughout the holiday months, there’s a good chance that the market is setting itself up for another great year ahead. However, it’s too early in the year to make any definitive statements. We’ll simply have to keep an eye on inventory levels and sales trends moving forward!