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Despite high interest rates and a dire inventory shortage, Silicon Valley’s housing market had a tremendous year and could likely outperform the nation as a whole in 2025, according to local sales data that Dave Walsh, former president and state treasurer for the California Association of Realtors and broker manager at the Compass Los Altos and San Jose offices, tracked throughout the year.
Santa Clara County and the greater region saw a 15% increase in sales across the board compared to 2023, according to the data.
“There is not a marketplace in our valley that has not done really well this year compared to last year,” Walsh said.
At the start of December, there were 1,109 active properties for sale (617 single-family and 492 mixed-used properties) and 919 pending sales in Santa Clara County. Sales have been averaging 200 a week, Walsh said.
“It’s been a very solid year due to insatiable demand in the county, especially for single-family homes,” he said.
Why is Silicon Valley doing better than other markets?
Silicon Valley is a stock market driven marketplace, so the market is very different from the rest of the nation, Walsh said. Sales have been great since September. In fact, in October, sellers overbid on 67% of properties, he said.
While higher mortgage interest rates are a challenge, Walsh noted – with the exception of downturns like the dot.com bust, the recession and the pandemic years – a 6.7% interest rate has been the 40-year norm.
The average Silicon Valley homeowner has $1.5 million to $3 million in equity compared to nationwide, where the average homeowner has $415,000 in net worth, according to Walsh.
What’s in store under the Trump administration?
Walsh acknowledged there’s still a question of future policies under President Donald Trump’s incoming administration. Will it be Trump growth or Trump recession? He expects certain provisions in the Tax Cuts and Jobs Act (TCJA) of 2017 that are set to expire after 2025 will be extended since the tax cuts benefited the majority of people.
Trump is on the side of the stock market, so it is likely assets will grow, he said. Trump’s policies on tariffs and immigration, however, could cause prices and the cost of housing to rise, as one-third of construction workers are reportedly illegal immigrants.
What are ongoing challenges?
Housing affordability and property insurance likely will be ongoing issues, Walsh said. According to the California Association of Realtors, only 1 in 5 Californians can afford to purchase a home, and about 74% of buyers reportedly could not close a transaction because of the inability to purchase homeowners insurance.
How will Silicon Valley perform in 2025?
The National Association of Realtors predicts home sales nationwide will increase 9% in 2025. The California Association of Realtors projects sales in the state will increase 10.5%. Walsh’s prediction: “Silicon Valley will outperform the nation as a whole with 15% growth in closed sales.”
Silicon Valley Association of Realtors (SILVAR) is a professional trade organization representing 5,000 Realtors and affiliate members engaged in the real estate business on the Peninsula and in the South Bay.
The term Realtor is a registered collective membership mark which identifies a real estate professional who is a member of the National Association of Realtors and who subscribes to its strict Code of Ethics.
