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Silicon Valley Newsletter - March 2026

Real Estate

Silicon Valley Newsletter - March 2026

The Big Story

Quick Take:
  • Median home sale prices are virtually flat on a year-over-year basis, as the market has settled into a holding pattern despite lower mortgage rates.
  • Inventory levels remain slightly elevated compared to last year, but the gap continues to narrow.
  • Existing home sales have pulled back on both a month-over-month and year-over-year basis, signaling that buyers are still waiting on the sidelines.
Note: You can find the charts & graphs for the Big Story at the end of the following section.
*National Association of REALTORS® data is released two months behind, so we estimate the most recent month's data when possible and appropriate.
 

Lower rates are finally making homeownership more affordable!

One of the biggest stories in the housing market right now is the continued decline in mortgage rates, and what that means for the average homebuyer's wallet. The average 30-year mortgage rate sat at 6.16% in January, representing a 10.85% year-over-year decline from the 6.91% we were seeing just a year ago. This decline in rates has had a direct impact on monthly payments, with the median monthly P&I payment coming in at $1,959 in January, down 7.90% from the $2,127 that the median homeowner was paying this time last year. That's roughly $168 per month in savings, which is great news for the average American.
 
However, despite the fact that rates have come down substantially, the median home sale price has remained remarkably stable, coming in at $396,800 in January. This represents just a 0.86% increase on a year-over-year basis, and a 2.05% decline from December. It seems like the market has found a bit of equilibrium, as lower rates are being offset by cautious buyers who aren't quite ready to jump back in just yet.

New listings are ticking up as we head into the spring

 
As we move out of the seasonally slow winter months, we're starting to see new listings pick up, which is a great sign for the market heading into the spring. In February, there were 362,180 new listings that hit the market, representing a 2.41% year-over-year increase and a 10.01% month-over-month increase. This uptick in new listings is encouraging, as it suggests that homeowners are starting to feel more comfortable putting their homes on the market. On the inventory side, there were 1,220,000 homes available for sale in January, which is up 3.39% on a year-over-year basis. While this is certainly a step in the right direction, it's worth noting that inventory levels are still well below the levels we need to see in order for the market to truly become balanced. That said, the combination of rising new listings and modestly higher inventory levels should give buyers a few more options to choose from as we head into the busier spring months.

Buyers are still taking their time on the sidelines

Despite the fact that mortgage rates have come down by nearly 11% on a year-over-year basis, buyers are still being cautious. In January, existing home sales came in at 3,910,000, representing a 4.40% decline on a year-over-year basis and an 8.43% decline from December. This tells us that while the affordability picture has improved quite a bit, many buyers are still waiting for rates to come down even further before they make their move. It's also worth considering that the seasonal slowdown plays a role here, as January is historically one of the slower months for home sales. As we move into the spring and summer, it'll be worth keeping a close eye on this metric to see if the lower rates and increasing inventory levels are enough to bring buyers off the sidelines.

A market that could go either way in the coming months

Right now, the national market is in an interesting position. Inventory levels are slightly higher than they were last year, but existing home sales have declined, which means that the supply of homes on the market is lasting a bit longer than it was at this time last year. With new listings beginning to pick up heading into the spring, and buyers still largely sitting on the sidelines, we could see inventory continue to build in the coming months. However, if mortgage rates continue to trend downward, that could be the catalyst that brings buyers back into the market in a big way. As always, real estate is a highly localized asset, which is why you should check out what's going on in your local market below in the Local Lowdown!

Big Story Data

The Local Lowdown

Quick Take:
  • Single-family median sale prices showed a mixed picture in February, with Santa Clara County rebounding strongly while San Mateo County experienced a significant year-over-year decline.
  • Inventory levels remain well below last year, with single-family home inventory down more than 12% year-over-year as the spring market begins to heat up.
  • Single-family homes are flying off the shelves, with listings in San Mateo and Santa Clara Counties selling in just 11 and 8 days, respectively.
 
Note: You can find the charts/graphs for the Local Lowdown at the end of this section.

Santa Clara County bounces back while San Mateo stumbles

The single-family home market in Silicon Valley showed divergent trends in February as the spring selling season got underway. Santa Clara County posted a modest 0.63% year-over-year increase in median sale price, with the median home selling for $2,000,000. Santa Cruz County remained flat compared to last year, with the median home selling for $1,250,000. However, San Mateo County saw a notable 8.24% year-over-year decline, with the median home selling for $1,950,000. The condo market continued its struggles, with declines across the board. Santa Clara County condos fell 10.97% year-over-year to $734,500, San Mateo County condos declined 8.07% to $765,000, and Santa Cruz County condos dropped 3.18% to $685,000.

Inventory remains constrained as buyers prepare for spring

As we move into the spring selling season, inventory levels continue to lag behind where they were last year. There are currently 1,350 single-family homes for sale across Silicon Valley, representing a 12.11% year-over-year decline. The good news is that new listings are starting to flow into the market, with a 20.34% month-over-month increase in new single-family listings and a 53.38% jump in sold listings compared to last month. The condo market tells a similar story, with 633 condos currently for sale, down 7.05% year-over-year. This persistent inventory shortage will likely create significant competition among buyers as we head deeper into the traditionally busy spring months.

Single-family homes are selling at a blistering pace

If you blinked, you might have missed it! Single-family homes in San Mateo and Santa Clara Counties are selling incredibly quickly, with the average listing spending just 11 and 8 days on the market, respectively. This represents no change from last year in either county, demonstrating just how competitive the market remains. Santa Cruz County homes are taking a bit longer, averaging 30 days on the market, though this still represents a 50% year-over-year increase. The condo market presents a different picture, with days on market increasing substantially across the region. San Mateo County condos are spending 64.29% more time on the market compared to last year, while Santa Clara County condos are up 21.43%. Most dramatically, Santa Cruz County condos are taking an average of 84 days to sell, a staggering 546.15% increase compared to February 2025!

Silicon Valley kicks off spring firmly in seller's market territory

When determining whether a market is a buyers' market or a sellers' market, we look to the Months of Supply Inventory (MSI) metric. The state of California has historically averaged around three months of MSI, so any area with at or around three months of MSI is considered a balanced market. Any market that has lower than three months of MSI is considered a seller's market, whereas markets with more than three months of MSI are considered buyers' markets.
 
The single-family home market remains a strong seller's market across Silicon Valley as we enter the spring season. San Mateo and Santa Clara Counties both have just 1.1 months of supply on the market, representing year-over-year decreases of 21.43% and 8.33%, respectively. Santa Cruz County has the tightest market of all, with just 2 months of supply, a dramatic 31.03% decline from last year. The condo market offers a bit more balance for buyers, with San Mateo County at 2.5 months of supply, Santa Clara County at 2.9 months, and Santa Cruz County at 3.6 months. With inventory levels continuing to trail demand and homes selling at a rapid clip, buyers should be prepared to act decisively when they find a property that meets their needs!

Local Lowdown Data

 

📞 Contact Patrice Horvath today at (650) 520-7675 

Patrice and the Illuminate Properties team specialize in helping Palo Alto, Mountain View, Los Altos, Los Altos Hills, Menlo Park, Portola Valley, Redwood City, San Carlos, Sunnyvale, and Woodside buyers and sellers navigate today’s evolving market with confidence.


Here's the Silicon Valley Monthly Market Update 2026

 

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