The Bay Area housing market is poised for another year of shifting dynamics in 2025, with inventory levels, mortgage rates and regional trends shaping outcomes for buyers, sellers and renters alike. While the market may not experience dramatic shifts, steady changes are expected across key areas, signaling new opportunities and challenges.

We talked with six experts to find out what they thought was ahead for 2025.

Rising inventory levels across California, particularly in the South Bay, are anticipated to tilt the balance slightly in favor of buyers, according to Jordan Levine, the senior vice president and chief economist for the California Association of Realtors. He noted that the state’s housing market is expected to improve overall, with sales rising by roughly 10% in 2025 after outperforming 2024 predictions.

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“Although price growth has slowed since rates have returned to historic norms and inventory has increased this year, supply remains tight, and affordability has deteriorated, so a full recovery to pre-pandemic levels is still a few years out, even though sales are expected to continue rising in the Bay Area during 2025,” Levine said.

An aerial image shows roller coasters at the Six Flags Entertainment Corp. California’s Great America amusement park, right, Mission Valley College, center, along with Silicon Valley area corporate office buildings and homes after a sunrise above Santa Clara, Calif., on July 3, 2024,

In the South Bay, Dave Walsh, the vice president and manager of Compass’ San Jose office, highlighted that inventory levels in 2025 are likely to start at least 20% higher than in 2024. Closed sales across the region have surged between 8% and 31% year over year, and Walsh predicts an additional 15% improvement in 2025.

Adding to this perspective, Orphe Divounguy, a senior economist at Zillow, noted that increasing inventory is helping homes stay on the market longer, leading to a slight cooling in home prices. He........

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