Bay Area Real Estate Market Update: What Q3 2025 Means for Marin, San Francisco & Sonoma
The Bay Area housing market stayed steady in the third quarter of 2025, with prices holding firm, inventory improving, and early signs of renewed buyer confidence on the horizon. Whether you’re in Marin County, San Francisco, or Sonoma County, understanding where things stand right now can help you plan your next move — whether that’s buying, selling, or investing before year’s end.
The Big Picture: A Market Holding Its Ground
Despite high interest rates, the San Francisco Bay Area real estate market remained strong this quarter. Inventory levels rose roughly 26% year over year, giving buyers more options for the first time in several seasons.
Sales volume overall stayed flat compared to 2024 — not because demand disappeared, but because buyers and sellers are still adjusting to higher borrowing costs. On the bright side, all signs point toward interest rate cuts later this year, which could reignite momentum heading into Q4 and early 2026.
Luxury homes led the way: sales over $2.5 million climbed 7%, and properties over $3.5 million jumped 12% compared to last year.
Homes are still moving quickly — averaging just about 30 to 40 days on market — and 42% sold over asking. So while the frenzy of 2021–2022 has cooled, competition hasn’t disappeared.
Marin County Real Estate: Balanced, But Still Strong
In Marin County, the market continues to show quiet strength. Median prices were up just over 2.5% from last year, and homes sold in under six weeks on average.
Inventory remains tight, but the homes that are prepped and priced well are still drawing serious interest. The lower end of the market (under $1.25M) continues to thin out, so buyers looking for entry-level options are facing limited choices.
For sellers, this is a time to focus on presentation, preparation, and pricing — homes that check all three boxes are still commanding multiple offers.
San Francisco Real Estate: Still Competitive at the Core
San Francisco remains one of the most competitive housing markets in the country. About 70% of homes sold above asking price, and many went for 20% or more over list.
Homes that are well located and move-in ready continue to attract multiple offers within days. That said, condos and smaller properties have stabilized a bit, creating opportunities for buyers who’ve been priced out in recent years.
If you’re thinking of selling in San Francisco, the data shows there’s still a strong pool of qualified buyers ready to act — especially if rates begin to fall later this year.
Sonoma County Real Estate: More Choices and Growing Interest
Sonoma County had one of the biggest jumps in available inventory this quarter — a welcome change for buyers who’ve been waiting for more selection.
The mix of full-time residents, second-home buyers, and investors keeps Sonoma’s market dynamic. More supply led to more closed sales this quarter, especially in lifestyle areas like Healdsburg, Sebastopol, and Sonoma Valley.
Buyers have a bit more breathing room here, and sellers who position their homes correctly are still seeing solid activity. It’s a great market for those seeking space, value, and lifestyle without sacrificing long-term appreciation potential.
What It Means for Buyers, Sellers & Investors
For Buyers
There’s finally more to choose from — and that’s good news. If you’ve been waiting for the market to “cool,” this may be your window.
Be ready with a full loan underwrite so you can act fast when the right home appears. Consider rate buydowns or flexible financing strategies to bridge the gap until rates drop.
Don’t wait for perfect conditions — focus on finding the right property and plan to refinance later if rates ease.
For Sellers
Today’s market rewards preparation. Homes that are well priced, beautifully presented, and marketed strategically still sell quickly and for strong prices.
Luxury sellers in particular are in a good position — the $2.5M+ segment continues to outperform the broader market.
For Investors
Marin offers stability and long-term value; San Francisco provides opportunities in condos and small multi-units; and Sonoma presents great potential for lifestyle or hybrid rental properties. With inventory improving, there’s more room to negotiate and identify solid cash-flow or appreciation plays.
What to Watch Heading Into Q4 2025
• Interest rates: The Federal Reserve has signaled that rate cuts could be coming before year-end. Even a modest drop can boost affordability and demand.
• Seasonal slowdown: Fewer listings typically hit the market during the holidays — which means serious sellers face less competition, and serious buyers can negotiate more confidently.
• Luxury momentum: The upper end of the market continues to lead in both volume and price stability.
Final Thoughts
The Bay Area housing market — from Marin to San Francisco to Sonoma — is evolving into a more balanced environment. It’s not the overheated market of the past few years, but it’s far from slow. Steady prices, improving inventory, and the potential for lower rates could make this a strategic time to act before competition heats back up.
If you’d like a custom snapshot of your neighborhood or price range, I’m happy to send a Q4 outlook showing what’s selling, what’s sitting, and where opportunities may be opening up.
Contact me here to get started — or simply reply with your area and goals, and I’ll create a personalized plan for you.
