San Jose Housing Market for 2025: High Competition, Rising Prices

In this report: A summary of recent housing market trends in San Jose, California along with a real estate and home-price forecast extending into 2025.

The San Jose housing market is once more bucking the national trend. At a time when home prices are flat or declining in many U.S. cities, they continue to climb steadily in San Jose.

If you’re familiar with the South Bay real estate scene, you probably already know the primary reason for this trend—inventory shortages.

The San Jose housing market still has a significant imbalance between supply and demand, which is putting upward pressure on already-high home prices.

One of the Tightest Housing Markets in America

Let’s start with the big story. As of fall 2024, San Jose and the rest of Santa Clara County have one of the lowest housing market inventory levels in America.

(In this context, inventory refers to the number of homes listed for sale at a given time.)

According to a September 2024 market report from the California Association of Realtors, Santa Clara County had the lowest real estate inventory level out of all 58 California counties.

The county had about a 1.7-month supply of homes for sale, well below statewide and national averages. Theoretically, that means it would take less than two months to sell all of the homes currently on the market if no new listings were added, based on the current sales pace.

What you need to know, as a home buyer, is that there are many more buyers in the market than there are properties available. This makes San Jose one of the most competitive real estate markets in the country—despite it having such high home prices.

This supply shortage will likely extend into next year as well, though we could see some improvement.

San Jose Home Prices Will Likely Rise in 2025

Toward the end of 2024, home prices in many U.S. cities were either flat or slowly creeping upward. This was due to a market “reset” following the astronomical growth of the pandemic years.

But San Jose presented a different picture entirely.

According to Zillow, the median home value in San Jose, California rose by a whopping 10.2% from October 2023 to October 2024. For comparison, the national median rose by 2.7% during that same timeframe, while the state of California posted a gain of around 4%.

In terms of home values, the San Jose housing market has had its share of ups and downs over the years. This market can be somewhat volatile and often marches to its own drumbeat, when compared to the rest of the U.S.

But for now, it seems likely that prices will continue to climb well into 2025. So a sense of urgency might be warranted among buyers planning a purchase.

Fast Home Sales Will Continue to Be the Norm

In many ways, the San Jose real estate market offers a lesson in extremes. It has some of the highest home prices in the nation along with the toughest competition among buyers.

It’s also one of the fastest-moving housing markets in the country.

As of fall 2024, homes listed for sale in San Jose, California spent a median of just 10 days on the market before going under contract. For comparison, the national median was around 35 days.

This accelerated pace of home sales will likely continue into 2025 as well, especially if mortgage rates decline a bit over the coming months.

For the most part, these forecasts represent a continuation of current housing market trends. And they all have something in common. They’re fueled by a lopsided supply-and-demand situation that has been going on for a long time.

Advice for San Jose Home Buyers in 2025

In a competitive housing market, home buyers have to go above and beyond to get their offers accepted. This is true for any part of the country where demand exceeds supply.

Home buyers in San Jose just have to take it to the next level.

• Pre-approval: Get pre-approved for a mortgage before starting your search. This shows sellers you’re serious and can afford the home.
• Work with an agent: A local agent can help you navigate the market, find suitable properties, and negotiate effectively.
• Be flexible: Consider homes outside your initial preferences, such as older neighborhoods or smaller properties.
• Act quickly: In a competitive market like San Jose, homes often sell within days. Be prepared to make an offer promptly, even on the spot if needed.
• Offer over asking: In many cases, offering slightly above the seller’s asking price can increase your chances of winning a bidding war.
• Consider contingencies: Be mindful of contingencies, such as selling your current home, as they could make your offer less appealing to sellers.
• Write a letter: A personalized letter can help your offer stand out, especially if it addresses the seller’s emotional connection to the home.

Above all else, submit a strong offer as quickly as possible, to get the jump on other home buyers. Houses sell quickly within the San Jose housing market, much faster than the national average. So you need every advantage you can get.

San Jose, California: A City Overview

Are you relocating to San Jose from elsewhere in the U.S., or from abroad? Here are some things you should know about this unique city.

San Jose is located in the heart of Silicon Valley, within California’s Bay Area. It lies at the southern end of the San Francisco Bay, about 50 miles southeast of San Francisco and 40 miles southwest of Oakland.

San Jose is bordered by cities like Santa Clara, Cupertino, and Milpitas, and is approximately 25 minutes from the Pacific Ocean. It sits in the Santa Clara Valley, surrounded by the Diablo Range to the east and the Santa Cruz Mountains to the west.

San Jose is the third-largest city in California (after Los Angeles and San Diego), with a population of roughly 1 million people as of 2024.

Economy and Major Employers

As the unofficial “Capital of Silicon Valley,” San Jose is home to numerous high-tech and innovation companies. Major employers with headquarters in the city include Adobe, Cisco Systems, eBay, PayPal, and Western Digital.

The surrounding area includes even more tech industry giants, including Apple in the city of Cupertino and Google in nearby Mountain View. Residents within the city produce more patents than any other U.S. city.

The city’s proximity to Stanford University, Santa Clara University, and San Jose State University helps to steer a lot of talent into the tech sector.

San Jose is part of Silicon Valley, a region of California with a high concentration of engineering, computer, and microprocessor companies.

Need a mortgage loan? Located in the Bay Area, Bridgepoint Funding offers a wide range of financing options. We specialize in providing jumbo loans for expensive properties, a common mortgage product in the San Jose area.