After two years of sluggish home sales held back by low inventory in California, February notched its highest level of inventory since before the pandemic.

“We are making progress down the road to recovery,” said Jordan Levine, chief economist for the California Association of Realtors.

So far, the increase in inventory, which was up 52% year-over-year in February, has outpaced sales.

“That’s helped to keep price growth more modest rather than the double-digit price growth that we saw a few years ago,” Levine said.

In the nine-county Bay Area, the median price of a single-family home declined slightly to $1.25 million in February, down half a percent from a year prior.The median price was $2.2 million in San Mateo County, $2 million in Santa Clara County, $1.6 million in San Francisco, $1.3 million in Alameda County and $841,000 in Contra Costa County, according to the association’s data.

In Marin, the median house price last month was $1.7 million, up about 4% from $1.64 million the prior February, the county assessor’s office reported. For condominiums and townhomes, the median price was $833,625 in Marin last month, up from $718,000 the previous February.

Real estate agents hope the increased choices in February will herald strong sales this spring — when the Bay Area market is traditionally the most active.

That buyers have been slower to seize upon an increased inventory is indicative of how the overall economic climate — a flagging stock market and persistently high interest rates — have affected demand.

“Typically there’s enough buyer demand to support that increased inventory,” said Jordan Mott, a San Jose agent with Intero. “But stocks have taken a hit in value, and a lot of our buyers in the area rely on those for their down payment and qualifications. There’s an uneasiness among buyers.”

The stock market sagged earlier this month after Trump said he would ratchet up his trade war, adding more tariffs on imports from China, Canada and Mexico.

“As of the last couple of weeks you’re seeing properties sit on the market longer than they were at the earlier part of the year,” Mott said. “There’s without a doubt been a shift in the market.”

Still, there are plenty of motivated buyers out there — including Fremont couple Krishna and Prashant Kumar Singh. In the six months since the two began house-hunting, they put in offers on 11 homes before they closed on a property in South San Jose on Monday.

“We were very close so many times,” said Krishna Singh. “We initially didn’t know the market very well, and we thought that we’d be able to get a home for $1.2 million. We revised our budget to $1.4 million, and eventually settled at $1.6 million.”

Homes are still selling quickly, too, spending a median time of 13 days on the market in February, versus 14 days a year prior. In Santa Clara County, homes stayed on the market a median of just eight days, and nine in San Mateo County.

While luxury buyers might be paying closer attention to the stock market, first-time buyers are more affected by mortgage rates. For a 30-year fixed-rate mortgage, rates have held steady around 7% the last six months, according to data from the housing finance giant Freddie Mac. That’s pushed up monthly payments up by hundreds — and in some cases thousands — of dollars.

On Thursday, Freddie Mac reported the average 30-year fixed-rate mortgage rate had eased to 6.65%. The average was 6.67% last week and 6.79% a year ago.

The Independent Journal contributed to this report.