You know, I've been reading the latest research from Realtor.com, and it paints an interesting picture of what's happening in our housing market right now. On the surface, things look more balanced than they've been in years. The gap between what sellers are asking for and what buyers are actually interested in has narrowed considerably since the end of 2025. Sellers have gotten more realistic about pricing, dropping their median asking prices slightly, while buyers who are still shopping seem to know exactly what they can afford. But here's where it gets complicated.
According to Realtor.com Research, the real story is that we've got what they're calling a K-shaped market, and it's pretty stark. The luxury segment is doing just fine with plenty of inventory and engaged buyers. But the entry-level market is in rough shape. When you look at the data, what's happened is that price-sensitive buyers have largely left the market altogether. Between 2021 and 2026, inventory doubled overall, but most of that new supply ended up in the mid-to-upper price ranges. Meanwhile, the share of homes listed below $370,000 actually shrank from fifty percent down to about forty-two percent.
What's really telling is where buyers are looking. Back in 2021, shoppers were hunting for entry-level homes at a much higher rate than those homes were available. But by 2026, that gap practically closed. Not because there's suddenly more entry-level inventory, but because the buyers who couldn't afford the higher prices have stopped shopping. The research shows that views per property in the entry-level segment have dropped to their lowest level since 2019, even though there's less inventory available now. That's the opposite of what you'd expect if those buyers were still in the market.
The luxury market tells a completely different story. Even though luxury inventory has grown significantly since 2019, buyer engagement has stayed stable. Those higher-end shoppers have the financial capacity to stay in the game regardless of inventory levels. Meanwhile, the entry-level market shows declining shopper engagement year after year, suggesting that price-sensitive buyers have been priced out of the picture entirely. So yes, the market looks more balanced on paper, but it's balanced because one group of buyers has essentially disappeared from the market.
What I'm seeing locally here in the Bay Area and out here in the East Bay and Fremont is exactly this dynamic playing out. We've got strong activity in the luxury segment and solid mid-tier inventory, but I'm getting fewer inquiries from first-time buyers and younger families looking at entry-level properties. The market isn't more balanced because everyone has found their place; it's more balanced because the price-sensitive buyers have largely stepped out of the picture. That's something we as professionals need to understand when we're talking to clients, because it changes what we're really dealing with in different price segments.
