What the Latest Data Means for Buyers, Sellers, and Move-Up Homeowners
If you’re building a real estate game plan for the Bay Area in 2026, you’re not alone. With interest rates hovering around 6% for more than three years, many buyers and sellers are asking the same questions:
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Is now the right time to move?
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Will inventory finally improve?
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What’s actually happening beneath the headlines?
Using the most recent December 2025 data, this January 2026 market update breaks down what’s really going on across Santa Clara County, the Peninsula, San Francisco, and the East Bay—and how people are making decisions right now.
A Familiar Seasonal Pattern, Not a Market Shock
December data often looks concerning at first glance—but context matters.
Across Santa Clara County, median home prices declined from their summer peak, which is normal seasonal behavior. For example:
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Early 2025 median price: ~$1.84M
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Summer peak (June): ~$2.12M
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December median: ~$1.5M
That swing represents roughly a 12% seasonal delta, similar to what we saw in prior years, including 2024. In other words, this is not a sudden correction—it’s a predictable year-end slowdown.
Inventory: Still the Core Issue
The bigger story continues to be lack of supply, not lack of demand.
While December 2025 saw more new listings than December 2024 (573 vs. 456), overall inventory remains far below peak-market levels. Compared to spring and summer months, December still has two to three times fewer listings.
This creates a key friction point:
Even motivated buyers with capital often struggle to find homes they’re willing to buy.
Sales Volume Remains Muted
Transaction volume paints a cautious picture.
Because most Bay Area purchases involve financing, closed sales typically lag listings by 30 days. December 2025 posted 734 sales, lower than prior years and down from November.
Is this alarming? Not yet.
There simply aren’t enough data points to confirm a long-term decline. The next few months—January through March—will be critical in determining whether this is a temporary pause or a more structural slowdown.
Median Prices by County (December 2025)
Here’s how pricing stacks up across the Bay Area:
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Santa Clara County: ~$1.50M
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San Mateo County: ~$1.51M
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San Francisco: ~$1.38M
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Alameda County: ~$960K
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Contra Costa County: ~$754K
The takeaway is flexibility. Buyers who can tolerate longer commutes continue to find far more affordability in Alameda and Contra Costa Counties, while core job centers remain expensive but stable.
How Buyers Are Adapting in 2026
Many buyers have accepted a reality shift: rates may not meaningfully improve anytime soon. Instead of waiting, they’re adapting.
Common strategies include:
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Starting with condos or townhomes
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Trading up using accumulated equity
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Leveraging strong stock market performance
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Using family wealth transfers or gifts
After three years of steady rates, people have adjusted their expectations and are moving forward with clearer math and longer-term thinking.
The Quiet Driver: Equity and Wealth Growth
Despite affordability challenges, buyer confidence is being supported by wealth gains elsewhere:
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Home equity from purchases made pre-2020
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Significant stock market appreciation
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RSUs, bonuses, and tech liquidity events
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Intergenerational wealth transfers
This is why activity hasn’t collapsed—even with higher rates. Buyers are offsetting borrowing costs with stronger balance sheets.
Why More Inventory Is Likely Coming
One under-the-radar trend could unlock more listings in 2026: capital gains timing.
Many homeowners who bought in 2019 or earlier are approaching the end of the 2-out-of-5-year primary residence capital gains exclusion window. That’s forcing decisions:
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Sell and capture tax-free gains (up to $500K)
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Convert to a long-term rental
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Keep and accept future tax exposure
As these deadlines approach, more entry-level condos and townhomes are likely to hit the market—good news for first-time buyers.
A Seller’s Dilemma in 2026
Sellers face a real decision:
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Bet on better market conditions later
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Rent and manage tenant risk
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Sell now and redeploy capital
While prices may not feel “spectacular,” many owners still have meaningful equity. For some, liquidity, simplification, or reducing leverage outweighs waiting for a perfect market.
These are no longer emotional decisions—they’re financial strategy conversations.
What to Expect Going Into Spring 2026
Looking ahead:
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Condos and townhomes: Likely flat or slightly down
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Single-family homes ($2M–$3M+): Still highly competitive
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Move-up buyers: Driving demand in prime locations
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Inventory: Gradually improving, but not flooding
There’s no explosion coming—but increased movement is generally healthier for the market.
Final Takeaway: 2026 Is a Planning Year
Right now, the most active buyers and sellers aren’t rushing—they’re planning.
They’re:
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Building timelines
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Preparing homes for sale
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Lining up financing and liquidity
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Getting ready for spring execution
If you’re considering buying, selling, or trading up in 2026, the most important step isn’t timing the market—it’s having a clear, realistic game plan.
Thinking About Your 2026 Strategy?
Whether you’re deciding to sell, rent, buy, or hold, these are math-driven decisions—not headline-driven ones.
If you want to walk through your numbers, options, and timeline with clarity, it’s worth having the conversation now—before spring competition ramps up.
📞 Call or text: 408-547-4590
📅 Or book time directly to map out your 2026 plan
The market may feel quiet—but the planning happening behind the scenes is anything but.