Silicon Valley's housing market appears to be headed in the right direction, according to market trends based on February 2025 MLSListings data. Presented to members of the Silicon Valley Association of Realtors last week by Aculist senior product marketing manager Michelle Ronco, market indicators show year-over-year positive shifts in the region's markets. Compared to the previous year, median sales prices of single-family homes in both Santa Clara and San Mateo counties increased to an all-time high. The number of new listings also increased substantially, particularly in Santa Clara County.
Santa Clara County's median price in February was $2 million compared to $1.8 million last year. This is an 11% month-over-month and year-over-year price appreciation. San Mateo County's February median sales price was $2.1 million, an appreciation of 18% month-over-month and 125% year-over-year, according to Ronco. Median prices in majority of cities in both counties increased by double-digit percentages. The median sales price for condominiums/townhomes also shot up to an all-time high of $1.12 million in Santa Clara County.
"These are strong numbers for this time of the year. We're seeing our markets ramp up significantly as demand and supply trend higher," observed Tammie Peters, president of the Silicon Valley Association of Realtors. "More listings signal more choices for homebuyers as the market enters the spring homebuying season."
Homes are selling for over asking at 109% list price ratio in Santa Clara County and 107% in San Mateo County. This doesn't mean there haven't been any price reductions as there are still sellers whose expectations do not align with buyer demand. Last month nine listings in Los Gatos had their asking price reduced compared to six in February 2024. In Saratoga, just one home's price was reduced compared to two last year. The market could see more price reductions if market competition increases.
Mortgage interest rates are still sticky but down from their peak of 7.75% in 2023. Early this week the average interest rate on a 30-year fixed mortgage was 6.72%, compared to 6.6% a week ago. The percentage of homebuyers applying for a home loan also rose 11% week to week, according to the Mortgage Bankers Association last week.
While the region's housing market remains strong, there is heightened economic uncertainty and a decline in consumer sentiment. The University of Michigan's Consumer Sentiment Index, which tracks consumer attitudes and expectations, dropped to 57.9, the lowest level since November 2022, from a final reading of 64.7 in February. Along with concerns about affordability, there are public concerns about price increases and inflation. Uncertainty about the Trump administration's tariffs has also shaken the stock market and may slow down economic activity as business owners weigh how tariffs will impact their bottom lines.
"I would advise buyers who can afford to purchase a home to focus on the factors you can control rather than trying to time the market.Get preapproved for a mortgage, research lenders who can get you the best deal, conduct a home inspection, and inquire about home insurance before negotiating on the best price for you," said Peters.
The Silicon Valley Association of REALTORS® (SILVAR) is a professional trade organization representing over 4,000 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.
Variations of this article have appeared in local area newspapers.
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