2025 has certainly been a turbulent year to say the least. In the 22 years that I have been in the real estate business, I have rarely been unable to at least project where the market might be going. Given fluctuating governmental policies, it makes making any predictions extremely difficult.
Video Summary
For those of you that prefer a video summary here you go!
2025 Year-in-Review
The year started off red hot for Sellers. Housing inventory was low and Buyers were abundant. It was shaping up to be yet another predictable Seller's market. Then in April the tariffs hit virtually every trading partner across the world. The stock market plummeted 20% and more importantly created fear and uncertainty amongst consumers. Homebuyers grinded to a halt. Seller’s that were looking to sell saw open house traffic drop to single digits, homes sat for weeks, then months. Price adjustments were made, but that didn’t get Buyers moving either. It wasn’t about price; it was about consumer sentiment and fear.
The NASDAQ has not only recovered the 20% loss, but it is also up 20% from the beginning of the year. The new wave of AI is driving investment in companies within that space but also causing many to lose their jobs as well. Companies are not adding headcount which is yet another concerning trend to monitor.
Ever since COVID, families have been traveling in June and July. This has made our summer markets slower. When families started to return from holiday mid-July, they started to notice some good deals on the market. Buyers started to snatch those deals up. There was slightly more Buyer activity through September.
Then the first-interest rate drop came by .25% on September 17th, which started getting some Buyers out of their seats. Then a second one .25% drop on October 29th. Mortgage rates are settling in the low 6% range and if you have liquid assets to move to financial institutions, your interest rate could be in the 5% range.
Here is a link to the slides of all of the data year to date.
Looking Forward to 2026
We have been seeing an in-flux of calls from Buyers getting pre-approved and looking for homes. The issue is that seasonally we are coming up on the holiday months, and inventory tends to dwindle down during this season. Homes in good school districts or prime locations close to the office are seeing more multiple homes. Homes that are not in those criteria may not sell as quickly or have just a single offer to work with.
Barring any drastic unforeseen changes (which is unlikely), 2026 should shape up to be a more balanced year for real estate. Homes with good schools will lead the way and homes in other locations we will have to monitor how they do on an area-by-area basis. But with the state of policy, I cannot confidently make any predictions.
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Real estate is a hyper local business please reach out to us for a customized real estate strategy for you and your family! Call or text Alan at (408)313-4352, e-mail alan@alanwangrealty.com for a consultation!
