B
ay Area home sales rebounded last year, rising 9% after a sluggish 2023 that saw the lowest level of sales since the Great Recession. Despite interest rates climbing to around 6.5%, buyers have adjusted to the new reality and are now more accustomed to higher rates. As one agent noted, "Buyers realize rates aren't going to get any lower; they just get used to them."

    The uptick in sales coincided with a 6.6% increase in home prices across the region. Prices rose significantly in several counties, including Alameda (6.1%), San Francisco (4.3%), and Santa Clara (9.3%). The luxury market also remained strong, fueled by a booming stock market and tech sector.

    All-cash deals accounted for one in five sales, with even higher percentages in upscale ZIP codes like Atherton (65%) and Berkeley (68%). While the number of listings increased 16% from last year, inventory remains lower than pre-pandemic levels. Agents predict it will remain tight this year due to higher interest rates and a lack of new construction.

    The California Association of Realtors' chief economist notes that while the worst may be behind us, it won't be a V-shaped recovery. The shortage of listings is partly due to a lack of new construction, with agents citing the need for more building in California to meet demand.