As we kick off 2026, the Silicon Valley real estate market continues to show unique regional dynamics, resilient pricing, and inventory challenges that both buyers and sellers should understand before making moves in Santa Clara County, the South Bay and the Peninsula.

• Santa Clara County’s median home price hovers around $1.8M, showing modest year-over-year stability despite seasonal swings.
• Real estate markets have seasonal slowdowns in the winter, which can modestly increase days on market. We are currently in the range of approximately 20-30 days to sell, throughout the South Bay.
• Inventory levels remain below historic averages, which continues to benefit sellers, though buyer activity persists even with higher mortgage rates.
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What this means: Sellers are still competitively positioned, and buyers need strong strategies and pre-approval confidence to win in a tight market. That being said, it's felt slow giving buyers a slight advantage.

 The South Bay ... anchored by San Jose, Morgan Hill, and Cupertino ... continues to reflect core Silicon Valley strength:

• Median values in many South Bay cities remain elevated relative to broader Santa Clara County averages.
• Low inventory persists, especially in desirable suburban neighborhoods, keeping sales competitive when priced well.
• Buyers are often willing to move quickly for well-priced single-family homes, while condos can see slightly longer days on market relative to detached homes.

Tip for buyers: Focus on readiness and responsiveness — the strongest offers often come from buyers who are pre-approved and are flexible on terms.

The Peninsula real estate market (including Palo Alto, Menlo Park, and San Mateo) continues to perform at a premium:

• San Mateo County has seen notable price gains relative to other Silicon Valley sub-markets.
• Peninsula homes routinely command higher price points due to proximity to tech centers, excellent schools, and commuter access.
• While inventory tightness impacts the region broadly, the Peninsula often feels it most keenly due to persistent demand.

Seller’s Edge: Well-positioned Peninsula homes continue to attract serious interest, often selling close to or above list price.

✔ Inventory constraints still define Silicon Valley — fewer homes for sale keeps pressure on both South Bay and Peninsula pricing.
✔ Affordability remains a challenge as mortgage rates stay elevated, though rates are expected to ease slightly through 2026.
✔ Seasonal normalcy is evident — slower winter turnover gives way to increased activity and listings as spring approaches.

Related content: Watch my 2025 market recap of the top 10 neighborhoods that saw the best ROI in 2025 video.

Under the current structure, buyers have separate representation and cover the cost of that representation through something called "cooperative compensation". In other words, the seller's agent shares their commission with a buyer's agent via escrow. This effectively allows buyers to finance their agent's commission rather than paying an additional fee on top of everything else, meaning less money out of a homebuyer's pocket upfront. Currently, seller's agents publicize the amount of that commission in their local Multiple Listing Services (MLS); typically 2.5% - 3% of the home's sales price.

Under the proposed structure, home sellers may opt to lower the amount they pay their agent, thereby eliminating "cooperative compensation" altogether. Without the ability to publicly display how much, if anything at all, would be shared with the buyer's agent, buyers will work out an agreement to pay their agent upfront.

The holiday season is one of the busiest and most joyous times of the year, so it's hard to imagine tacking on another "to-do" ... let alone a major one such as buying or selling a home. While it might not seem like a good time to take on such a monumental project -- there are benefits for both sides. Whether you're a buyer or a seller, check out the top 3 benefits of a holiday home sale.

1) Motivated Buyers
Who wants to spend their free time and holiday vacation touring homes? Serious buyers, that's who. While open house attendance and home tour requests might be lower than the (usually busy) Spring/Summer season, the number of truly motivated buyers will be higher — think quality over quantity. Anyone shopping for a new home between Thanksgiving and the New Year is likely to be a serious buyer — and your house may be exactly what they’re searching for! If you work with an agent to list your house this winter, you’ll be able to get in front of the buyers who are ready to purchase now, in the hopes of making a move before the year ends. 

2) Potential for Negotiation
Fewer buyers per home reduces a seller's upper hand making it a more balanced negotiation process. Sellers may be more willing to negotiate price, contract terms, and closing date, especially if your offer is the only one around. Home prices tend to be lower around the holidays and then you couple that with threats of a recession and we're seeing sellers offer unprecedented buyer credits and interest rate buy-down options, making it more affordable than ever to be a home buyer.