Silicon Valley Market Update: Spring Momentum Meets Tight Inventory

The Silicon Valley housing market entered May with a mix of strong buyer demand, limited inventory, and highly localized price movement. Nationally, the spring selling season gained momentum as prices rose, inventory improved, and existing home sales picked up. Locally, however, Silicon Valley remains far more competitive — especially for single-family homes.

The Big Story: The Spring Rally Is Building

National housing data showed renewed strength in May, with prices moving higher and buyers becoming more active.

Key national takeaways:

• Median home prices rose to $429,300, up 2.83% month over month and 1.32% year over year.
• This was the fourth consecutive month of price increases since January’s market low.
• Mortgage rates eased to 6.37%, down from 6.76% one year ago.
• The median monthly principal and interest payment came in at $2,201, only slightly lower than last year’s $2,259.
• Inventory reached 1.55 million homes, nearly matching last year’s levels.
• Existing home sales rose to 4.17 million, up 3.22% month over month and year over year.

The takeaway: buyers are coming back, but affordability remains tight. Lower mortgage rates have helped, but rising home prices are beginning to offset some of that relief.

More Inventory, But Also More Demand

National inventory improved in May, giving buyers more choices heading into summer. However, demand increased at the same time.

That balance matters.

When inventory rises but sales also rise, the market does not necessarily shift in buyers’ favor. Instead, it suggests that buyers are absorbing new supply quickly — especially when mortgage rates become more favorable.

If rates continue to ease, buyer activity could strengthen further. If rates move higher again, inventory may begin to build and create more leverage for buyers.

Local Lowdown: Silicon Valley Remains Highly Competitive

While the national market is showing signs of balance, Silicon Valley continues to tell a much tighter story.

The local single-family home market remains firmly in seller’s market territory, especially in San Mateo and Santa Clara Counties.

County-by-County Price Trends

May showed a split picture across Silicon Valley.

Single-Family Homes

• San Mateo County: Median sale price rose 6.87% year over year to $2,210,000.
• Santa Clara County: Median sale price declined 5.58% year over year to $2,050,000.
• Santa Cruz County: Median sale price declined 6.38% year over year to $1,254,500.

Condos

• San Mateo County: Condo prices rose 24.06% year over year to $842,400.
• Santa Cruz County: Condo prices rose 36.51% year over year to $860,000.
• Santa Clara County: Condo prices declined 8.85% year over year to $711,000.

The takeaway: Silicon Valley is not moving as one single market. Price trends vary significantly by county and property type, which makes local strategy more important than ever.

Inventory Is Tightening Across Silicon Valley

One of the biggest local stories is the drop in available homes.

• There were 2,071 single-family homes for sale, down 18.94% year over year.
• New single-family listings were down 11.79% compared to last year.
• Sold single-family listings were up 4.47%, showing that buyer demand is absorbing inventory quickly.
• Condo inventory also declined, with 896 condos available, down 9.77% year over year.

This means buyers are not simply dealing with high prices — they are also dealing with fewer options.

For sellers, this creates opportunity. For buyers, preparation matters.

Homes Are Still Selling Quickly

Single-family homes continued to move fast across the region.

• San Mateo County: Average days on market was 12 days.
• Santa Clara County: Average days on market was 11 days.
• Santa Cruz County: Average days on market was 14 days.

Even though San Mateo and Santa Clara saw slight year-over-year increases in days on market, homes are still selling in under two weeks on average. That is a fast-paced market by any standard.

The condo market showed a more mixed picture:

• San Mateo County condos sold in 28 days, faster than last year.
• Santa Cruz County condos sold in 23 days, also faster than last year.
• Santa Clara County condos took 25 days, slower than last year.

The takeaway: single-family homes remain the most competitive segment, while condos offer a more balanced picture depending on location.

Months of Supply Shows a Clear Seller’s Market

Months of Supply Inventory, or MSI, helps show whether the market favors buyers or sellers. In California, around three months of supply is generally considered balanced.

Silicon Valley’s single-family market remains well below that threshold.

• San Mateo County: 1.4 months of supply
• Santa Clara County: 1.8 months of supply
• Santa Cruz County: 3.1 months of supply

This places San Mateo and Santa Clara Counties firmly in seller’s market territory, while Santa Cruz is closer to balanced but still much tighter than last year.

The condo market is more balanced:

• San Mateo County: 3.5 months of supply
• Santa Clara County: 4.3 months of supply
• Santa Cruz County: 3.9 months of supply

The takeaway: single-family homes are still highly competitive, while condo buyers may have more room to negotiate depending on the county.

What This Means for Sellers

For sellers, the current market is creating strong opportunity — especially for well-prepared single-family homes.

However, success is not automatic.

The homes that perform best are still the ones that are:

• Priced correctly
• Presented well
• Marketed strategically
• Positioned clearly against the competition
• Launched with strong preparation from the start

With inventory down and homes selling quickly, sellers who enter the market with the right strategy may be in a strong position this summer.

What This Means for Buyers

For buyers, the market requires preparation and focus.

More national inventory may sound encouraging, but locally, Silicon Valley inventory remains tight. Buyers should be ready for competition, especially when pursuing single-family homes in San Mateo or Santa Clara County.

Smart buyers should have:

• A clear budget
• A proactive lender
• Updated pre-approval
• A strong understanding of local comps
• Clear priorities
• A strategy before writing an offer

This is not a market where buyers need to panic — but it is one where they need to be prepared.

Bottom Line

Nationally, the market is showing signs of renewed activity, with prices rising, inventory improving, and buyers reentering the market.

Locally, Silicon Valley remains much more competitive.

Single-family inventory is down, homes are selling in under two weeks, and months of supply remains well below balanced levels in key counties. At the same time, price trends vary by county and property type, creating a market where strategy matters more than broad headlines.

Whether buying or selling, the key is understanding the local numbers — and building a plan around them.