Buying and Selling Guide to Real Estate in San Rafael

 

While the fundamentals of developing a winning buying and selling strategy remain the same, you should also consider current local housing market indicators. To give you an overview of the San Rafael market, this guide will cover the following topics:

 

• Housing Market Behavior in an Elevated Rate Environment and Low Inventory
• Supply and Demand Trends for Single-Family Homes and Condos in San Rafael
• Key Housing Market Indicators for San Rafael
• Listing a Home at the Right Price

The single-family home market experienced ----------

 

Year over year, the median single-family home price in San Rafael was ----------

 

Supply and demand and mortgage rates have significantly driven prices over the past year. Locally, San Rafael experienced a ------% -----increase/or/decrease----- in homes sold year over year.

 

The average 30-year fixed mortgage rate in the United States has more than doubled since December 2021, increasing by about --- percentage points, negatively affecting affordability. For example, increasing a homeowner’s interest rate by just 1% would cost them about $500 per month on a $1,000,000, 30-year mortgage. 

 

Single-family home inventory throughout 2025 looked ------. ----add more content here-------

 

Months of Supply Inventory (MSI) — the measure of how many months it would take for all current homes for sale on the market to sell at the current rate of sales — is typically low in the area. In California, the long-term average MSI is around three months, which implies a balanced market that doesn’t favor buyers or sellers. San Rafael is almost always in a sellers’ market for single-family homes due to the low supply relative to demand. MSI currently indicates ------ market for single-family homes. 

 

In this section, we analyze the single-family home market across several key indicators to provide the necessary information for you to refine your winning buying and/or selling strategy. As market conditions change, we can look at the data in real time to make the best decisions. 

 

In February 2025, single-family home prices ----increased/decreased--- year over year in terms of median price, but price per square foot ------. 

 

The current housing market favors ------ in San Rafael.

MSI was ----- in February for single-family homes, which implies that the market favors ----buyer/or/sellers----. -----Add content-----

The Days on Market (DOM) implies that sellers should expect offers to be accepted in about ---- days for single-family homes. If it takes longer to receive offers, sellers should consider reducing their prices. Buyers should proceed with caution and consult with an experienced agent before making an offer on a home that has been on the market for longer than the average DOM because the price may be too high, or something may be wrong with the property.

Sale-to-list-price ratio — a measure of the difference between the original list price of the home and the final sale price — reflects the negotiation power of homebuyers and home sellers under current market conditions. The average single-family home sold for --% of its original list price. However, we will see in the next section that properly pricing a home can make a huge difference in the percentage of list price the seller receives.

 

We can split homes sold into two categories: homes sold without price reductions and homes sold with one or more price reductions. Price reductions may indicate problems that need to be fixed, poor marketing, and/or bad showings. More often, however, price reductions occur because the home was overpriced and misaligned with market data from the time it was first listed.

Overpricing a home can create a negative feedback loop. Initial offers fail to materialize because the home is overpriced, the Days on Market surpasses the average, and new potential buyers assume there’s something wrong with the property. More price reductions and low offers might follow as the home sits on the market, causing the final selling price to come in below what the property could have garnered had it been priced correctly in the first place.

For an example of such a scenario, we can look at the February 2025 single-family home data.

 

A total of ---- homes sold without price changes, recording an average of ---% of their original list prices and spending ---- days on the market. In contrast, the --- homes that sold with one or more price reductions recorded only --% of their original list prices (on average) and spent over ---- times as long (-- days) on the market. These numbers underscore the importance of a well-informed pricing strategy. 

 

In the first quarter of 2025, we anticipate fewer new listings and sales due to normal seasonality and the current economic environment. The cost to finance a home is still more than enough to price buyers out of the market. We experience this ourselves with buyers not uncommonly. Higher mortgage rates also impact sellers, since they are often buying in conjunction with selling their homes, unless the cash out from the sale allows them to bay cash for their new home. ----All that said, demand for homes in the area will likely outpace the homes on the market, creating price support------. --------Overall, the housing market has shown its resilience through both the pandemic and this new chapter of rising mortgage rates and high inflation, remaining one of the most valuable asset classes.-------

As always, we remain committed to helping our clients achieve their current and future real estate goals. Whether you’re planning to buy or sell, we can guide you through the options that best fit your needs. Deirdre and I as experienced professionals are happy to discuss the information we’ve shared in this white paper. We welcome you to contact us with any questions about the current market or to request an evaluation of your home.