Lynn North's Market Update

The 2026 real estate market started with more motivated buyers, eager to find their homes with low inventory through February. This pent-up demand resulted in multiple offers and higher sale’s prices, as buyers competed to obtain their homes, especially with single family homes.

In March, we saw a high increase of listings & a turbulent economy, with challenging tariffs and a war in Iran, resulting in an oil shortage crisis. As is virtually always the case, well-priced and prepared, and effectively marketed new listings can still sell quickly, often well above the asking price.

In the broader financial landscape, consumer confidence showed a decrease from earlier in the quarter and remains very low by long-term standards. Attention is now focused on the Federal Reserve’s upcoming decision regarding the current rates with threats of a recession looming given the war and a jittery market. See Patrick Carlisle, Compass

2026 Housing Market Projections

• Mortgage Rates: Mortgage rates are expected to increase in the mid 6% range.
• Home Prices: Modest appreciation is expected, with prices in the low-to-mid single digits (around 2-4%).
• Inventory & Sales: Active listings are expected to increase, offering more choices for buyers, though supply will still be constrained in popular areas.
• Market Balance: The market will become more balanced, offering more negotiating power to buyers, while sellers must price correctly to sell quickly.
• Regional Differences: Single-family homes in desirable areas will remain strong, while condos and townhomes in certain areas may face slower sales or stagnation. 

Key Factors Influencing 2026

• Regional Demand: Strong demand is expected to continue for well-located properties, particularly in tech-heavy areas.
• Economic Factors: A soft job market, with AI as a disrupter, potential economic downturns, and regional layoffs could impact demand, especially for higher-density, lower-priced housing.
• Investor Activity: Investors are expected to remain active but selective, contributing to a more nuanced market rather than a rapid boom. 

Based on the tariffs, we had a really slow spring market, where it basically stopped for 3 months from March through May due to the volatile stocks and uncertain economy. Note that the spring market is usually our strongest of the year! This resulted in that summer became a late spring market and more momentum for the fall market as well. 

With mortgage rates trending downward, we should see increased buyer activity and more competition for listings. As you know, the fall market is really September through October, as the market slows down for the holiday season and then picks up early in the new year!  Let me know if I can help you in any way, as it is a great time to sell too!

It is impossible to know how median and average value statistics apply to any particular home without a specific comparative market analysis. These analyses were made in good faith with data from sources deemed reliable, but may contain errors and are subject to revision. It is not our intent to convince you of a particular position, but to attempt to provide straightforward data and analysis, so you can make your own informed decisions. Median and average statistics are enormous generalities: There are hundreds of different markets in San Francisco and the Bay Area, each with its own unique dynamics. Median prices and average dollar per square foot values can be and often are affected by other factors besides changes in fair market value. Longer term trends are much more meaningful than short-term.

Median list price for Santa Clara County, CA is $1,899,975. Inventory has held steady at or around 884.

Santa Clara Valley

Demographics Impact on 2026 Real Estate Market

When rates start to decline, there will be an influx of buyers and sellers. Per lenders and top analysts, we are expected to get into the mid 5.5% range by the 1st quarter 2026! 

Housing demand will be fueled by the largest generation of potential homebuyers – the millennials!

Millennials:

• US Millennials population is 72 million
• Medial age of people moving out of their parent’s home is 26
• Medial age of first-time home buyers is 35

The impact of Baby Boomers:

• Largest group of all homeowners are aged 65+
• Buyers aged 57+are more likely to downsize
• Baby Boomers are 52% of all seniors

The average homeowner equity is about $274K

*Data provided by Buffini & Inman