As October wrapped up, several major economic indicators continued to shape Bay Area housing trends. The S&P 500 and Nasdaq reached new all-time highs, 30-year mortgage rates dropped to their lowest point in over a year, and the Federal Reserve issued its second 0.25% rate cut of 2025—though policymakers hinted that a December cut is not guaranteed.
Inflation ticked up slightly to 3%, and consumer confidence remained broadly low, with many households worried about personal finances, job security, and rising costs. However, affluent buyers—those benefiting directly from strong stock market gains—remain far more active in local real estate markets. The Economic Policy Uncertainty Index has eased from the tariff disruption spike in April, yet it remains elevated by historical norms.
San Francisco: A Market on Overdrive
San Francisco’s real estate market continues to accelerate at a remarkable pace, driven by the explosive growth of the AI startup sector.
- Home sales in October were the highest since May 2022
- Luxury home sales hit their strongest level in four years
- Price reductions dropped 46% year-over-year
- The pending ratio—a key gauge of market heat—reached its highest level since the peak of the pandemic boom
- 80% of single-family homes sold over asking price
Buyer demand is surging while listing inventory declines, creating one of the tightest seller’s markets SF has seen in several years.
Santa Clara County: Luxury Leads the Way
Santa Clara County also saw strong performance in October, particularly in the higher-end market.
- Overall monthly sales volume was flat year-over-year
- New contracts dipped slightly
- Luxury home sales surged to the best October ever recorded
- The county now has the highest pending ratio in the entire Bay Area
- 56% of homes sold above the asking price
- Price reductions are far lower than their early-summer peak, but still slightly higher than last fall
The tech and AI sectors continue to fuel confidence and demand among high-income buyers.
San Mateo County: Strongest Since 2022
San Mateo County remains one of the strongest and most resilient markets on the Peninsula—again with luxury activity leading the surge.
- The median single-family home price increased year-over-year
- Condo median prices fell slightly (a trend seen across most Bay Area condo markets)
- New contracts, closed sales, and luxury sales all hit their highest levels since spring 2022, the peak of the pandemic boom
- 56% of home sales closed over asking price
- Price reductions are dramatically lower than early summer highs
Demand is up. Inventory is tightening. Competitive conditions are returning in many segments of the market.
Looking Ahead: A Seasonal Slowdown… or Not?
Historically, mid-November through mid-January is the quietest period of the year for Bay Area real estate.
But given record-level stock markets, falling mortgage rates, and the continued AI boom, this winter may not follow the usual pattern.
For buyers, this late-year window is often when the best deals appear—especially on listings that have been sitting since summer or fall.
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