June 2026 Market Update

AI Boom Continues to Fuel Housing Demand

The Bay Area housing market hit a lot of national headlines in May. In San Francisco, AI and tech-driven demand has created aggressive bidding wars on the scarce inventory. Skyrocketing rents are back in the norm. Even the city's condo market, which has been under pressure for six years, is showing signs of demand recovery.

For the first time in many years job creation in the Bay Area is positive and economic opportunity is attracting net inbound migration, despite the region's chronic shortage of homes and affordability issues. It's notable that other tech cities like Seattle and Austin are not seeing the boom in the real estate market related to AI. In fact, those cities are now sending more people to San Francisco than the reverse.

For much of the region, interest rates matter more than stock market performance. In May, mortgage rates jumped higher with sharply higher inflation data. That tension between higher interest rates and the wealth effect is likely to continue for the rest of 2026. Inflation pressures have been pushing higher, and it seems unlikely that interest rates will dip again very soon.

Steady mortgage rates, a surging stock market, and renewed Bay Area job growth are helping fuel housing demand across Silicon Valley.

More homes are hitting the market, but Santa Clara County home prices remain resilient, reflecting continued buyer demand across Silicon Valley.

Though still volatile, Santa Clara County's condo market is becoming more balanced as inventory grows and prices moderate.

Homes are continuing to sell quickly across Santa Clara County, with single-family homes moving faster than condos and demand remaining strongest in the single-family market.

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