T
he San Francisco Bay Area experienced the largest regional decline in sales in California, with a 4.1 percent drop compared to last year. This significant decrease has raised questions about the real estate market in one of the most desirable places to live.

    Home sales across California are down, but the Bay Area is feeling the pinch more than other regions. According to the California Association of Realtors (C.A.R.), existing single-family home sales in California totaled 261,820 in July 2025, a 4.1% decrease from July 2024. The San Francisco Bay Area's 4.1% dip was the most significant among all regions.

    Here's a breakdown of how different regions in California fared in July 2025:

    * Far North: 4.8%

    * Central Coast: 1.7%

    * San Francisco Bay Area: -4.1%

    * Southern California: -1.7%

    * Central Valley: -1.5%

    Within the Bay Area, several counties experienced sales declines: Alameda (-7.4%), Marin (-13.2%) and Santa Clara (-8.7%). However, San Mateo bucked the trend with a 12.2% increase in sales.

    The median home price in the San Francisco Bay Area remained unchanged year-over-year at $1,300,000, but dipped from June 2025's median of $1,400,000, indicating a cooling market. Across California, the median home price was $884,050, down 0.3% from July 2024.

    The increasing housing supply is influencing the market, with the Unsold Inventory Index (UII) at 3.7 months in July 2025, up from 2.9 months last year. Total active listings were up a whopping 37.7% from a year ago, reaching a 69-month high.

    With increasing inventory and slightly declining prices, the market is shifting away from being a strong seller's market. Buyers are gaining more leverage, with homes staying on the market longer and room for negotiation.

    Several factors contribute to these trends:

    * High mortgage rates: Although rates have decreased since last year, they remain high enough to deter potential buyers.

    * Economic uncertainty: Concerns about the overall economy make people hesitant to buy a home.

    * Seasonal slowdown: The summer months often see a slight dip in real estate activity.

    The current average 30-year fixed mortgage rate is around 6.58%, significantly impacting affordability. Even slight fluctuations in mortgage rates can affect a buyer's monthly payment and purchasing power.

    For sellers, it's crucial to be realistic about pricing, while buyers have more breathing room to explore different neighborhoods and negotiate prices. The market can shift again, so it's essential to secure good financing by speaking to multiple lenders.