Despite significant negative economic effects from the Iran war, including rising interest rates, volatile financial markets, soaring oil and gas prices, and concerns about increased inflation, Bay Area real estate markets held surprisingly strong in March. Buyer demand and home sales continue to hold steady as we progress through the spring season.
That’s not to say I haven’t noticed changes in the housing market.
My fellow agents and I are seeing a decreased sense of buyer urgency, increased negotiation activity, and even some requests for creative financing. This, however, is not indicative of a housing collapse. What we are seeing today is sometimes referred to as “market filtering.” Buyers have not disappeared. They have become more selective. This distinction is critical for sellers.
What “filtering” means
In a strong, fast-moving market, almost any well-located home will attract attention. In a more sensitive environment, buyers slow down, scrutinize value carefully, compare options more rigorously, and will hesitate on homes that are overpriced or require too much work.
The result is a clear separation: well-prepared, well-priced homes still sell quickly and homes that require work or feel mispriced may sit longer.
Preparation Matters More Than Ever
When the market filters, preparation is no longer optional; it is strategic. Sellers should focus on three key areas:
1. Condition
Homes should be as close to move-in ready as possible. This should include fresh, neutral paint colors, clean, consistent flooring, and repair of visible deferred maintenance. Buyers in uncertain times prefer certainty, and a turnkey home makes them feel more comfortable making an offer.
2. Clarity
Pre-sale inspections, disclosures, and documentation are important in getting buyers to move forward with offers. Bay Area sellers have known this for years and it’s more important than ever.
3. Presentation
Professional staging, lighting, and photography are essential. Buyers are comparing more options, often online first. Your home must stand out immediately.
Pricing Strategy Becomes More Precise
In a filtering market, it’s important to understand your audience. Homes that may have a smaller target audience due to issues with location, condition, or floor plan need to price closer to value.
Even exceptional homes in high-demand locations may not automatically generate a bidding war, so think carefully about the risks before you consider severely underpricing your home. Compare your home to the current competition and ask “will my price be compelling to buyers when compared to these other homes in the same price range?” Look at the homes that are in escrow – did they have multiple offers? How did they price and prepare their homes and what did they experience as a result? This “real time research” is critical in deciding your pricing. A well-priced home attracts immediate attention, generates competition and creates urgency.
Know your value
Even in volatile conditions, serious buyers remain active, especially in markets like the Bay Area. Many have good cash reserves and are waiting for the right opportunity. The advantage shifts to sellers who are fully prepared, realistic on pricing, and smart with negotiations. It remains true that the probability of getting a high offer starts to decrease over time, but know your value. There are buyers out there who will submit low offers right away. If you understand your home’s value, you won’t feel pressured to take the first offer you get.
The Bottom Line
This is not a market to fear, but one to approach thoughtfully. Opportunities for success remain. The difference is that outcomes now depend more on preparation, pricing, and strategy. Homes that align with today’s market are being rewarded, while others may take longer to find the right buyer.
