Silicon Valley Real Estate Market Update – August 2025 - Seb Frey, Silicon Valley + Bay Area REALTOR

The Silicon Valley housing market is shifting — and the July 2025 numbers tell a story that national headlines aren’t capturing. If you’re buying or selling in Santa Clara County or San Mateo County, here’s what the latest data means for you.

Economic Backdrop: Rates Down, AI Boom Up

After a turbulent spring, the economy is showing signs of stabilization. Interest rates have dipped to their lowest point in nearly a year, stock markets are hitting fresh records, and economic volatility has eased.

One major driver? The AI boom. While some call it over-hyped, the big investment dollars are treating it as a long-term play — and it’s reshaping local real estate demand.

Sales Volume Down Sharply

In Santa Clara County, the median single-family home price in July 2025 held steady at around $1.8 million, but sales volume was down 40% year-over-year.

In San Mateo County, median single-family prices ticked up 2.6% to $1.8 million, yet sales volume dropped even more sharply — down 47.4% compared to July 2024.

This tells us that while pricing in prime Silicon Valley counties is resilient, buyers are taking a cautious approach. They’re moving forward only when a home represents a strong value in today’s shifting market.

Inventory & Absorption Trends

Active listings are up:

Santa Clara County: +26% year-over-year in July
San Mateo County: +18% year-over-year

But absorption rates — the percentage of homes going under contract — have ticked down. This means sellers are still putting homes on the market, but buyers have more room to be selective. Well-priced, well-presented homes are selling; overpriced listings are sitting.

The Hidden Detail: New Listings Down

Despite higher active inventory, new listings in July actually declined:

Santa Clara County: -11% year-over-year
San Mateo County: slight increase year-over-year

Homes are staying on the market longer:

Santa Clara County: 24 days on average (+44% vs. last year)
San Mateo County: 25 days on average (+56% vs. last year)

This is a clear sign that market tempo has slowed.

Condos & Townhomes Lag Behind

Both counties are seeing declines in condo and townhouse pricing:

Santa Clara County: -3.5% year-over-year
San Mateo County: nearly -10% year-over-year

This segment hasn’t rebounded like the higher-end single-family market. For buyers — especially investors or first-time homeowners — this could be an opportunity to secure a better deal.

Price-Per-Square-Foot Insights

Santa Clara County: $/sq.ft. up slightly for single-family homes, down for condos.
San Mateo County: $/sq.ft. down for both houses and condos.

Even where median prices are stable, buyers may be getting more home for their money.

The Bottom Line

Silicon Valley isn’t one monolithic housing market — it’s really two or three overlapping markets:

Affluent, tech-driven demand is keeping the upper tier strong.
Mid-tier and condo segments are softer, offering opportunities for strategic buyers.
Longer market times mean buyers have more leverage, but desirable homes still move quickly.

What This Means for You

Sellers: High-end properties with strong presentation will still find buyers quickly. Pricing strategy is critical.
Buyers: Patience in the condo or mid-tier segment could pay off.
Everyone: Lower interest rates are a fresh tailwind, but competition for “A-list” homes remains strong.

Work With a Silicon Valley Expert

Whether you’re moving into or out of Silicon Valley, this is a complex market that demands experience, patience, and skill. The stakes are high, and the competition is strong — your REALTOR® matters.

If you’d like to discuss your needs, wants, and timeline, call or text me anytime at 408-413-3087. Let’s make your next move your best move — with clarity and confidence.