February '26 Market Update

Market Outlook: Greater Bay Area Real Estate

As we move deeper into 2026, the Greater Bay Area housing market is gaining momentum — driven largely by declining mortgage rates and a sharp contraction in inventory. While national trends show improving affordability, local supply shortages are shaping a very different competitive landscape.

The Big Picture

Mortgage rates have continued their downward trend, recently reaching the lowest levels seen in nearly three years. The average 30-year mortgage rate began December around 6.15% and has edged lower since.

As a result, the median monthly principal and interest payment has fallen to $2,023 — down 5% from one year ago. Lower borrowing costs are gradually improving affordability and putting more purchasing power back into buyers’ hands. However, despite improved financing conditions, housing activity nationally remains relatively steady. Existing home sales, new listings, and inventory are all hovering close to last year’s levels — suggesting many buyers are still waiting to see whether rates fall further before making a move.

In the near term, rates are expected to hold relatively steady, with markets anticipating potential cuts later this year rather than immediately.

The Local Lowdown: Bay Area Snapshot

While national data looks stable, the Bay Area tells a more aggressive story — particularly in the single-family home market.

Prices: A Split Market

Single-family homes are surging in several counties:

• San Francisco: +16% year-over-year

• Marin County: +19%

• Napa County: +18%

Meanwhile, Santa Clara County saw a modest 3.9% year-over-year decline in median single-family prices, and a few other counties posted slight softening. Condos continue to lag behind, with pricing declines in multiple Silicon Valley and East Bay markets, though San Francisco condos posted a small gain.

Inventory: Extremely Tight

Inventory has contracted sharply across the region:

• North Bay: down 45% year-over-year

• San Francisco: down nearly 38%

• Silicon Valley: down 12%

• East Bay: down roughly 18–20%

San Francisco currently has fewer than 500 homes for sale citywide — an exceptionally tight supply environment. Until listing activity increases meaningfully this spring, buyers will continue facing limited options.

Speed: A Tale of Two Markets

The divide between single-family homes and condos is widening.

Single-family homes are moving quickly:

• San Francisco: average 13 days on market

• Alameda County: average 19 days

Condos are sitting much longer:

• Santa Clara County: 55 days

• Santa Cruz County: 67 days

Even in inventory-constrained markets, buyers are being selective — particularly in the attached housing segment.