Marin Real Estate Market Update Spring 2025

March 17, 2025

Rates are down! That's good right?

Shortly after the election I doubled down on my prediction that a Trump presidency would lead to higher interest rates as the fed tried to battle inflation triggered by a combination of tariffs, deportations & tax cuts.

Now I'm sure you'll understand that I'd love to be proved wrong, and you may have heard that after starting the year at above 7%, 30 year fixed rate mortgages have dropped about half a percent on average. So that's cause for celebration, right?

Well unfortunately, the driving force behind declining rates is eroding confidence in the economy.

Simply put mortgage rates correlate with 10 year treasury rates. When the Fed makes big moves as they did in Spring 2022, the 10 year treasuries reflect that. But these smaller moves are a result other factors - largely the effect of economic uncertainty.

Elections usually reduce uncertainty

In the usual course of events there is a slight slowdown in housing market activity in the lead up to an election. During an election cycle, many people shy away from big financial decisions, which can lead to a temporary slowdown in home sales. This happened in both the 2016 and 2020 elections. However, once the results are in and market confidence is restored, activity usually picks up.

This is not normal

Whatever you think of the actions of the current administration, Its quite clear that we are going through a period of extreme uncertainty. Global alliances and trade networks that have been the foundation of rising global prosperity for the last 80 years are being destroyed. The cost of essential supply chain components is uncertain and access to foreign markets impossible to predict. This uncertainty is having an a huge effect on the business community. Like potential homebuyers and sellers, businesses are reluctant to make big decisions under these circumstances - committing to investing in equipment and infrastructure or hiring new staff. Consequently investors are nervous, which is causing the drop in the stock market and treasury/mortgage rates.

So what does this mean for the Marin Housing Market?

Since the post COVID frenzy was extinguished by the huge increase in mortgage rates of Spring 2022, we've seen a gradual softening of prices in Marin. As owners became reluctant to give up their low interest rates, we saw a dramatic reduction in the number of listings. So while there are fewer buyers able to afford the high prices and high costs of buying a home in Marin, the lack of sellers has slowed the correction we've seen.

Buyer's Market?

Current events are exacerbating the reluctance of both buyers and sellers to act - however many sellers have less choice than buyers - a significantly higher number of the listings we've seen since 2022 have been triggered by events such as the death or divorce of the sellers, or career relocations. These sellers need to sell. Many buyers feel they have the luxury of waiting. This means that while not a textbook buyers market (4 months supply of inventory) buyers are in a stronger position in Marin than they have been since the depths of the housing market crisis in 2008-12.

What to do now?

A good rule of thumb "time in the market beats timing the market". Owning your own home is the number one way Americans have built wealth, and most likely you'll only be able to point to the bottom of the market when its in the rear view mirror. Meanwhile unlike other investments you can enjoy your home even if the value temporarily dips.

Despite current political and economic turmoil, its likely Marin will continue to be a highly attractive place to live with limited housing options being sought after by a relatively affluent local population.

If you are considering buying a home here, don't wait for prices to decline more or for interest rates to go down further - you can take advantage of lower rates when they happen. If you find a home that suits your needs for the foreseeable future and that you can afford, grab the opportunity.

If you already own a home here, and are thinking of selling, I'd be happy to advise on your options based on your unique situation. I love helping people sell when its the right decision for them, but I'm happy to acknowledge that staying put is often the best option.