Author: Brenda & Barry Zwahlen

As longtime residents and dedicated real estate professionals in the Bay Area, we've witnessed firsthand how resilient our housing market can be, even in the face of ongoing affordability challenges. The outlook through 2026 points toward stable home prices with modest growth—a reflection of continued strong buyer demand and the ever-present shortage of quality inventory. Competition is especially fierce for move-in-ready properties in sought-after neighborhoods, a dynamic that we routinely navigate for our clients. In the luxury segment, areas such as San Francisco, San Mateo, and Marin are expected to remain robust, buoyed by the influence of tech wealth and stock market performance. While sales activity should hold steady into late 2026, we anticipate that shifts in mortgage rates will keep influencing buyer confidence and overall market momentum. With over 60 years of combined real estate experience and deep roots in the San Ramon Valley, we’re committed to guiding our clients with the knowledge and professionalism they deserve as they make decisions in this evolving market.

For years, it’s been almost a given that new homes come at a higher price per square foot than resale properties. But right now, builder incentives are rewriting that script—creating an intriguing shift in the value equation for buyers. Nationally, we’re seeing new homes compete directly with, and sometimes undercut, resale prices. This change is driven by two supply dynamics: builders needing to sell completed inventory, and existing homeowners holding on to their properties, which keeps resale inventory tight and competition stiff. Having worked in the San Ramon Valley for over four decades, we’ve navigated many market cycles, but it’s rare to see new construction shift from premium status to a position where buyers can negotiate even more favorably—especially in neighborhoods with ample builder inventory. In contrast, areas with limited new construction still tend to favor resale sellers. Looking ahead, the advantage for buyers may depend on continued permitting and building activity, as today’s new-home discounts could narrow if supply slows. As always, deep local expertise and understanding of these dynamics are essential in helping our clients make informed decisions.

As we look across the United States, homebuyer affordability is shaped by the interplay of three big drivers: mortgage rates, income growth, and the pace of home price increases. True, lasting relief for buyers isn’t tied to just one of these factors—it’s about how they all come together. The national index measures affordability by comparing payments to income, so any improvement—be it from lower rates, smaller loan amounts, or higher earnings—makes a tangible difference for buyers. On the flip side, affordability worsens when payments outpace income, whether that’s due to bigger loans, rising rates, or stagnant wages. For those keeping an eye on national trends (and for us with decades of experience navigating these shifts), the most telling signals are still mortgage rates, income patterns, and whether home price growth continues to moderate. With our deep roots in the local market and a long track record of guiding clients through cycles like these, we always keep a close watch on these fundamentals to help buyers make informed decisions.

It's not every day we see new construction homes outpacing resale properties in value, but that's the landscape we're seeing across many parts of the country. Newly built homes are now selling at a median of $205 per square foot, a bit less than the $212 per square foot for existing homes. This reversal, which appeared in about a third of major US markets, is a notable shift from the longstanding norm where new builds typically commanded a premium. What’s driving this? Builders are responding to increased competition—especially in areas where new inventory has expanded—by offering more competitive pricing and meaningful incentives. For buyers, this may open up new options, particularly in well-supplied neighborhoods where there’s more room to negotiate. As realtors who have spent decades navigating changing markets in the San Ramon Valley and beyond, we always pay close attention to these trends. The big-picture lesson remains: increasing the number of homes is the surest route to greater affordability, though we’re mindful that permitting delays could challenge that progress. As always, our goal is to help clients approach these opportunities with clarity and confidence, armed with deep local knowledge and a commitment to professionalism.

Mortgage rates continue to hold steady near 7%, and this persistence is keeping affordability front and center for anyone considering a move, investment, or refinance. As we monitor the latest economic signals, it’s clear that factors like sticky inflation and the possibility of another Fed rate hike could put further upward pressure on these rates. In our decades navigating real estate markets—particularly here in the San Ramon Valley—we’ve seen how wider mortgage-backed securities spreads can also play a significant role in the rates buyers ultimately face. For a meaningful drop in rates, we’d need to see real progress on inflation, more stable long-term yields, and a supportive stance from the Fed, along with healthier MBS spreads. For now, it’s wise to treat current rates as the planning baseline. Any future rate relief is best considered a welcome bonus, not a guarantee. Our experience has taught us the value of staying informed and prepared in any market climate.

Indigenous Peoples’ Day celebrates, recognizes, and honors the beautiful traditions and cultures of the Indigenous People
We take a stand for and support the indigenous people on this day.
We should also offer our support to those who invest and uplift the indigenous communities.