July 2025 Market Update DRAFT

New Opportunities Emerging As the Bay Area Market Evolves

The Bay Area’s spring 2025 market softened as political and economic uncertainty, including April’s stock market drop, led some buyers to step back. For active buyers, this meant more listings to choose from, less competition, and greater room to negotiate. Prices dipped in most counties, making it a more favorable time to purchase compared to recent years.

Santa Clara County continued to perform strongly this spring, with median prices reaching new record highs thanks to steady luxury demand. In other Bay Area markets, sellers who priced competitively were able to attract serious buyers who were focused on taking advantage of improved conditions and greater selection.

Most May sales reflected contracts signed before the stock market rebound that followed changes to China-tariff policies. With financial markets showing signs of stability, earlier buyer caution may be giving way to renewed confidence. While some uncertainty around interest rates and global developments remains, current trends point to a more positive outlook as the year progresses.

What We're Seeing: We are observing more price reductions, and some sellers are accepting offers below their initial expectations. Buyers now have more options to choose from, creating a more balanced environment.

However, well-priced homes with good condition continue to attract multiple offers and still sell at strong prices.

April’s surge in economic uncertainty reduced contract activity, which in turn led to fewer closed sales in May. Encouragingly, the index dropped in May and is expected to fall even further in early July.

After sharp stock market declines in March and April, a strong rebound in May combined with improving economic uncertainty and consumer confidence may show stronger sales activity in June.

After rising with the tariff shock, mortgage rates have held steady near 7% for two months. They’re slightly below last year’s level, offering more stability even if buyer demand remains muted.

In recent months, Santa Clara County home prices have continued to climb, reaching a new all-time high in May 2025. The 3-month rolling median sales price rose 6% year-over-year, extending the market’s steady upward trend.

While the housing market in May 2025 remains strong, Santa Clara County’s Months Supply of Inventory (MSI) reached its highest May level since the pandemic. This reflects a modest increase in active listings compared to earlier in the spring, although overall supply continues to be historically low.

However, the condo market has been running much weaker than the house market: Insurance and construction upgrade issues have hurt condo sales in many regions.

This could be a great opportunity for buyers, as there are more options available and potentially less competition — especially in the condo and townhome market.

Questions? Reach out to us at (650) 988-5114.