May/June Gatti Report
Your Greater Danville Area Real Estate Update
Every spring I sit down to write this update, and usually the market tells a clear story. This year is a little different. The numbers look almost identical to last year, and yet if you talk to anyone who has been out there buying or selling, it has felt nothing like last year. That gap between what the data shows and what people are actually experiencing is exactly what I want to dig into here.
The backdrop has been noisy. The
conflict in Iran and the oil disruptions that followed rattled confidence early in the spring, much like the tariff volatility that shook things in 2025. Energy prices ripple through everything: transportation, construction, groceries. When those expectations seep into inflation forecasts,
Treasury yields follow, and mortgage rates move with them. The chain reaction quietly but meaningfully erodes buyer purchasing power.
National Market Trends
On a national level, headwinds are becoming more measurable. Mortgage rates have climbed to 6.32% on a 30-year fixed loan, up from 5.98% before strikes on Iran began in February, and March existing home sales fell 3.6% the lowest level since June 2025.
What makes that figure particularly telling is that it largely reflects contracts signed before the war even started. Analysts had expected 2026 to be a
recovery year for housing, but rising rates tied to Federal Reserve uncertainty have disrupted that outlook, leaving many buyers feeling frozen as geopolitical events shift faster than they can respond.
Local Market Snapshot: Greater Danville Area
Includes Alamo, Danville, Diablo, and San Ramon
Here in the Greater Danville Area, the parallels to last year are striking. While inventory felt higher at the start of the spring season back in February, the broader data tells a different story. Our local market is tracking remarkably close to last year across nearly every category:
- Active Detached Listings: 248 this year, compared to 249 last year
- Days on Market: Improved to an average of 32 days versus 42 last year
- Pending Sales: 103 this year versus 105 last year
- Closed Sales: 91 between April and May, compared to 98 last year
- Month-over-Month Closings: Down 21.8%, from 126 to 91 detached properties
The one figure I keep coming back to is that month-over-month closing drop. In the heart of spring, closings are supposed to hold steady or climb. A dip of that size right in the middle of the season is not a seasonal blip. Something more systematic is going on.
The K-Shaped Market
Here is what I think is really happening: we are watching the market split in two. It is what economists call a "K-shaped" market, and the AI wealth effect has a lot to do with it. In the two years since ChatGPT launched, luxury home prices in Bay Area ZIP codes rose an average of 13.4%. The most affordable ZIP codes dropped 3.8%. Same region, very different outcomes.
Ultra-high-net-worth buyers are not losing sleep over rate swings. They are transacting largely in cash or equity and treating real estate as a long-term wealth move. But for everyone below $2M, monthly payment sensitivity is real and binding. Condos are especially tough right now because HOA fees eat into the affordability gains of a lower purchase price, which makes them a harder sell in this environment.
I want to be clear: this market is not broken, it is sorting. Homes with deferred maintenance, overpriced condos, and listings priced to last year's comps are the ones struggling. Well-prepared, correctly priced properties are still moving, sometimes quickly. Knowing which side of that line your home sits on is the most important thing I can help you figure out.
Global Factors & the Path Forward
The path forward is increasingly tied to how the Iran conflict and its disruption to global oil markets continues to unfold. There are several critical unknowns still in play: whether the current price pressures are a temporary shock or something more entrenched, how long American consumers can absorb the strain before pulling back, and what the spillover effects mean for economies far less energy-independent than our own.
When inflation expectations rise, Treasury yields tend to follow, and mortgage rates move with them. How these forces resolve themselves over the coming months will have a direct bearing on where the housing market lands by year's end.
For sellers, my honest advice is this: do not wait for a market that may not come back this summer. The buyers who are out there are serious and informed. They are not overpaying. Realistic pricing, a clean presentation, and creative terms will get you to the closing table. Holding out for more often just means more time on market and a lower final number anyway.
For buyers, this is genuinely a moment with real opportunity, especially if you are patient and strategic. There is less competition at many price points than there was two years ago, sellers are more open to negotiation, and rate buy-downs are on the table in a way they have not been before. The key is running the numbers carefully and having someone in your corner who knows this market inside and out.
Partner with the Gatti Team
I am a third-generation Danville resident, and this community is not just where I work, it is where I grew up and where I'm starting my own family. That kind of connection shapes how I approach every transaction.
I have been serving clients in the Greater Danville area for 14 years, and I had the privilege of learning the business alongside my father, Ron Gatti, who spent 48 years in local real estate and built a reputation in this community that I am proud to carry forward. As an Associate Broker with Compass, I bring national resources together with the kind of local knowledge that only comes from genuinely knowing these neighborhoods.
Whether you are thinking about selling and buying in 2026, I would love to sit down and have a real conversation about your situation. No pressure, just honest guidance from someone who truly cares about getting it right for you.
