Market Update - May 2025
Market Action Index - May 2025
Transitional does not equal Transactional
The selling season has commenced, but enthusiasm appears to be lacking. We observe an increasing number of sellers ready to enter the market, yet buyers seem hesitant. The data remains consistent. Affordability and housing sentiment have shown slight improvement despite rising interest rates and tariff concerns. Encouragingly, there was news this week regarding a pause on tariffs. That did, however, negatively affect interest rates for the moment.
In light of the current market conditions, many individuals are left pondering, "What's next?" While I lack a crystal ball, I can confirm that we find ourselves in a transitional market. Significantly, transitional does not equate to transactional for most people. There are specific circumstances that increase the likelihood of selling, but these do not typically apply to buyers. This discrepancy contributes to the rising inventory, which is approximately 20% below pre-COVID levels. Additionally, 42% of sellers are offering concessions, along with 37% of homes experiencing price reductions.
In summary, this is arguably the best buyer's market we have seen in years. If you are willing to navigate the uncertainty and believe in the value of real estate, especially regarding a primary residence, this transitional period may present an excellent opportunity for you. The duration of these market condition remains uncertain, but if you subscribe to the philosophy of 'zigging' when others are 'zagging,' you could be on the brink of a remarkable opportunity.
If you are considering buying, selling, or simply want to discuss strategies, I welcome the opportunity to connect. Let's chat!
Market Segments - May 2025
“Nearly 30% of agents say staging increases a home’s sale price by up to 10%, and almost half believe it helps homes sell faster. Most buyers find it easier to picture themselves living in a home when it’s staged, especially in key rooms like the living room and bedroom.”
Market Profile - May 2025
HOT TOPICS
Would you like a home valuation and neighborhood report every month?
Those receiving these have really enjoyed them! If you’d like a free home report every month, all I need is your address and an email for you. It’s a great way to track home values, loan information, and know exactly what’s being bought and sold in your area Send me an email brendan.gail@kw.com to be added!
Tariffs on imports from China put on pause:
The U.S. and China have agreed to temporarily pause most of the tariffs they’ve placed on each other, with the U.S. lowering tariffs on Chinese goods to 30% and China cutting tariffs on U.S. products to 10% for 90 days. This pause boosted the stock market and U.S. dollar, but also caused mortgage rates to rise due to optimism about avoiding a recession.
The Federal Reserve continues to hold interest rates unchanged:
The Federal Reserve kept interest rates steady between 4.25% and 4.50%, choosing to wait for more economic data before deciding on future changes. Markets responded positively, but the Fed remains cautious due to ongoing trade negotiations and inflation concerns.
California housing affordability inched up in the first quarter:
Housing in California became slightly more affordable in early 2025, with 17% of households able to buy a median-priced home. However, mortgage rates remain high, keeping monthly payments elevated and making it hard for many to afford homes.
Housing sentiment bounces back after reaching 15-month low:
Consumer confidence in the housing market slightly improved in April but remains lower than last year, with mixed feelings about buying or selling a home. Concerns about rising mortgage rates and the economy persist, though fewer people now worry about losing their jobs.
Reach out anytime! Call, text, or message me 😊
Brendan
P.S. Referrals are greatly appreciated! It’s one of the best compliments. If you know anyone with real estate questions, please send them to me. Thank you!