The residential real estate market has almost as many influencers as TikTok. Not only does everyone have an opinion, but there are many complicating factors within the supply and demand basics that affect the market such as the prime rate, the stock market, jobs, wages, consumer confidence, consumer price index, wars, tariffs and COVID-19 just to name a few. But over the last five years nothing has reflected home sales as closely as the inverse relationship of mortgage rates, as shown in the graph above. Supply and demand have found an equilibrium, both being weaker.

Supply is weak because in 2020 and 2021 we supercharged the market with 2-3% mortgage rates and the market oversold volume compared to normal real estate life cycles. We also saw homeowners refinance into those low rates. Home supply for the resale market is down because homeowners are less interested, or able, to give up those low interest rates and sell.

So with housing supply down, prices should be going up. But they are equal or slightly declining. We are seeing this because there are fewer buyers. And what buyers are out there shopping have less buying power. With mortgage rates up, inflation up, and the uncertainty of the market, buyer demand is down. 

Q1 2026 shows a slightly flat market across Alamo, Moraga, Orinda, Lafayette, Danville, Concord, Clayton, Pleasant Hill, Walnut Creek & Martinez — and interest rates are the biggest factor.  In Episode 71 of The Real Story with Adam & Sherry, linked to below, we break down exactly what’s happening in Contra Costa County — and what we predict next. If you live, invest, or are simply watching the market, this is the data you need to hear. 

And if you plan to buy or sell this year or the next, call us.  Unlike many influencers we’ve got the experience to back up the data.