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| Each week, the Silicon Valley Association of Realtors (SILVAR) shares local housing data, sales trends, expert insights and other real estate-related topics. This week, the association provides insights from Dave Walsh, vice president and sales manager of Compass in Los Altos and San Jose, on the state of the Silicon Valley housing market. |
Silicon Valley kicked off the spring homebuying season with a significant surge in inventory alongside a notable decrease in pending sales.
Dave Walsh, vice president and sales manager of Compass in Los Altos and San Jose, said this year’s market presents a complex picture.
According to Walsh, the Silicon Valley housing market, which includes all of Santa Clara County and the Midpeninsula cities of Menlo Park, Atherton, Portola Valley, Woodside and Redwood City in San Mateo County, has seen a 72% increase in the number of homes currently on the market compared to the same time last year. While pending sales are down year-over-year, the volume of new listings entering the market is above average.
Sales activity, however, isn’t necessarily the same everywhere within the market. There is a healthy underlying demand in certain areas, Walsh said. Peninsula cities like Atherton, Los Altos, Los Altos Hills and Palo Alto are performing very strongly. In the first quarter of 2025, Los Altos and Palo Alto shattered multiple records across the board, including home prices, speed of sales and overbidding. Atherton saw its sales increase 36% compared to the previous year, and in Los Altos Hills, home sales jumped 31%, according to Walsh’s sales data.
Signs of a coming slowdown?
The fact that pending sales have not kept pace with increasing inventory within the overall market suggests a potential slowdown in the rate at which these homes are being sold, Walsh said. In March, the number of homes listed in Santa Clara County was 1,111, but the number of homes sold was 664, according to sales data compiled from the Multiple Listing Service. In San Mateo County, 281 homes sold out of the 466 properties newly listed last month, according to the sales data.
“It’s the volatility that’s starting to concern people. If they’re coming from the stock world, the reality is that’s where their down payments are from.”
Walsh said this discrepancy is concerning, particularly as it coincides with the recent stock market volatility, which can impact buyers’ down payments and reduce their purchasing power.
“It’s the volatility that’s starting to concern people,” Walsh said. “If they’re coming from the stock world, the reality is that’s where their down payments are from.”
Walsh pointed to other potential headwinds like stricter lending requirements, a rise in appraisal and fire insurance contingencies in sales contracts, and the broader economic impact of potential federal policy changes concerning immigration and trade. Restrictions on the influx of international talent and high tariffs on imported construction materials, for example, could negatively affect both demand and the cost of development, he said.
Walsh said there also is a significant number of unsold multi-unit residential buildings. In Santa Clara County, the number of unsold planned developments is currently at a level not seen since 2013, he said. This is concerning because high vacancy rates and rent increases for multifamily properties may lead to oversupply and deter investors and potential buyers, he added.
Due to the ongoing economic uncertainty, Walsh recommends that potential buyers and sellers pay attention to updates about economic conditions and government policies.
“The nature of the current market is unpredictable,” he said. “No one knows how this will all unfold because a lot of unexpected things are happening with trade and federal policy.”
Market still competitive, for now
Despite a current increase in available housing coupled with fewer sales, the Silicon Valley real estate market remains competitive, and there continues to be strong demand and high prices for the area’s homes, Walsh said. A recent home on the market received nine offers and ultimately sold for over $1 million above its asking price, he said.
“This area attracts the best and brightest from all over the world,” he said. “To have the opportunity to live and work here is very fortunate.”
Silicon Valley Association of Realtors (SILVAR) is a professional trade organization representing 5,000 Realtors and affiliate members engaged in the real estate business on the Peninsula and in the South Bay. SILVAR promotes the highest ethical standards of real estate practice, serves as an advocate for homeownership and homeowners, and represents the interests of property owners in Silicon Valley.
The term Realtor is a registered collective membership mark which identifies a real estate professional who is a member of the National Association of Realtors and who subscribes to its strict Code of Ethics.
