Property Makler
Advanced analytics for residential real estate investing

San Jose-Sunnyvale-Santa Clara, CA housing market

Housing market indicators

Indicator	2022	2023	2024	2025*	2022	2023	2024	YTD
Median Listing Price per Square Feet	$818	$818	$806	$838	0.1%	0%	-1.5%	4%
Active Listing Count	956	833	825	1,698	79.7%	-12.9%	-1%	105.8%
Median Days on Market	53	43	50	38	-19.7%	-18.9%	16.3%	-24%
Share of listings with price increase	1.3%	1.3%	1.6%	1.6%
Share of listings with price decrease	11.8%	8.9%	8.7%	11.3%

* last available value

Home prices

Short term housing supply drivers

Long term housing demand drivers

Long term housing supply drivers

Note: 12M MA - 12 months moving average, Permits - New Private Housing Structures Authorized by Building Permits. Source: FRED

Housing market overview

Cities and geographic areas in San Jose–Sunnyvale–Santa Clara, CA MSA

MSA corresponds to Santa Clara County (core of Silicon Valley), population about 1.9–2.0M, highly urbanized, limited greenfield land, framed by the San Francisco Bay, Santa Cruz Mountains and Diablo Range.
Key sub‑regions: North San Jose/Berryessa, West San Jose/Cupertino, Central & Downtown San Jose, South San Jose, Sunnyvale–Santa Clara–Mountain View corridor, Palo Alto–Los Altos, Milpitas, Morgan Hill–Gilroy (southern rural/suburban transition).

Area	City/town	Population (approx)	Density (people/sq mi, approx)	Income level	Quality of schools (GreatSchools, typical range)	Crime level (relative within MSA)	Property tax (effective % of value, typical range)	Personal income tax (local, above state)	Comments
Central core	San Jose	~1,000,000	~5,600	Mixed – mid to high, varies strongly by neighborhood	From 3–4 in lower‑income areas to 9–10 in top clusters (Almaden, Evergreen, some North SJ magnets)	Moderate to higher in downtown/east; lower in affluent south and west	~0.8–1.3% (Prop‑13 constrained; higher for recent purchases)	None	Most diverse sub‑markets; large tech employment base; major transit and downtown intensification.
Northwest corridor	Sunnyvale	~155,000	~7,000	High	Generally 7–10; several elementary and high schools rated 9–10	Low to moderate	~0.9–1.2%	None	Strong mid‑to‑upper‑middle‑class ownership; close to major campuses; strong long‑term demand.
Northwest corridor	Santa Clara	~130,000	~7,000	Upper‑middle	Broad 5–9 range; some highly rated schools, others midrange	Moderate (higher near commercial/arterials)	~0.9–1.2%	None	Central jobs–housing hub; older housing stock; strong rental and condo demand.
Peninsula edge	Palo Alto	~68,000	~2,900	Very high	Mostly 9–10, among the top in state	Low	~0.8–1.1% but extremely high assessed values	None	Luxury price tier, severe supply constraints; anchored by Stanford and top tech; high global demand.
Peninsula foothills	Los Altos / Los Altos Hills	~42,000 combined	~4,000 (Los Altos), very low (Hills)	Very high	Largely 9–10	Very low	~0.8–1.1%	None	Estate‑style single‑family homes, very limited new construction; strong wealth preservation market.
Peninsula core	Mountain View	~83,000	~7,000	High	Mostly 7–10, depending on attendance zones	Low to moderate	~0.9–1.2%	None	Home to major campuses; dense multifamily along transit; tight rental and condo markets.
Northeast gateway	Milpitas	~80,000	~6,800	Upper‑middle	Typically 6–9	Moderate	~0.9–1.2%	None	Transit‑oriented growth near BART; mix of older SFH and newer townhomes/condos.
South county	Morgan Hill	~50,000	~3,700	Middle to upper‑middle	Generally 6–9	Low	~1.0–1.3%	None	Suburban/semirural with newer subdivisions; more attainable prices; strong commuter base to north.
South county	Gilroy	~60,000	~3,200	Middle	Mostly 4–7	Low to moderate	~1.0–1.3%	None	More price‑sensitive market; agricultural interface; longer commutes; cyclical affordability valve.
West valley	Cupertino	~60,000	~5,600	Very high	Predominantly 9–10, among state’s highest demand districts	Very low	~0.8–1.1%	None	Anchored by Apple; intense school‑driven demand; very limited new SFH supply.
West valley	Campbell / Saratoga	~70,000 combined	~6,000 (Campbell), lower in Saratoga	High to very high	Campbell 6–9; Saratoga 9–10	Low	~0.8–1.2%	None	Established SFH neighborhoods; strong owner‑occupancy; limited infill opportunities.

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Citizens: income and education

Median household income for the MSA is very high (roughly mid‑$150k range), among the top of large U.S. metros.
Income distribution is bifurcated: large upper‑income tech/professional cohort coexists with lower‑income service and manufacturing workers.
Share of households earning $200k+ is substantially above U.S. average; but cost of living and housing erode real disposable income.
Education levels are exceptional: about 60%+ of adults hold at least an associate or bachelor’s degree, with nearly 30% holding graduate or professional degrees.
STEM concentration is high: many residents in computer science, engineering, mathematics and related business fields.
Significant foreign‑born share, especially from Asia; high proportion of highly educated immigrants in tech and engineering roles.

Key economic sectors

Information technology and software – headquarters and major campuses for global technology firms; core driver of high incomes and Class A office demand.
Semiconductors and hardware – design, R&D and some advanced manufacturing; cyclical but structurally important.
Venture capital, startups and innovation – dense ecosystem of early‑stage and growth capital, incubators, and accelerators.
Education and research – Stanford University and other institutions feeding talent and innovation.
Healthcare and biotech – growing cluster of medical, device and biotech employers.
Professional services – legal, finance, consulting tied to tech ecosystem.
Logistics and advanced manufacturing – concentrated in north San Jose, Milpitas, Santa Clara corridors and south county industrial parks.
Retail, hospitality and services – dependent on local high‑income base; pressured by online commerce and tech layoffs.

Housing buying market: supply drivers

Land scarcity
- Urbanization rate is extremely high; very little vacant greenfield inside the urban growth boundaries.
- Topography (baylands, hills, fault zones) further constrains buildable land, especially in Palo Alto, Cupertino, Los Altos, Saratoga.
Zoning and regulatory strictness
- Historically restrictive single‑family zoning in many high‑income suburbs; strong local resistance to upzoning and height.
- State housing laws (ADU legalization, density bonuses, RHNA requirements, builder’s remedy) are gradually forcing more multifamily capacity, but local implementation remains slow and contested.
- Environmental review (CEQA) and discretionary approvals add cost, risk and time to large projects.
Production mix
- New supply is dominated by mid‑rise and some high‑rise apartments/condos in downtown San Jose, North San Jose, Santa Clara, Sunnyvale and Mountain View corridors.
- Very limited creation of new single‑family subdivisions north of Morgan Hill/Gilroy; SFH stock is effectively fixed in most built‑out cities.
- ADUs (accessory dwelling units) are adding incremental low‑density supply across many neighborhoods.
Construction costs and capacity
- Labor and material costs are among the highest in the U.S.; union labor and stringent codes increase per‑unit costs.
- Financing for large multifamily projects has tightened due to higher interest rates and tech‑related economic uncertainty, delaying some pipeline projects.
Local policy and fees
- Inclusionary zoning, impact fees, school fees and infrastructure requirements raise total development cost per unit.
- Some cities offer density bonuses, reduced parking and streamlined approvals for affordable and transit‑oriented projects, but scale is still modest relative to demand.

Housing buying market: demand drivers

Migration patterns
- Net domestic out‑migration has been negative in recent years, driven by high costs and remote‑work flexibility.
- International in‑migration of highly skilled workers partially offsets that decline but has slowed compared with peak years.
- Some demand is shifting within the region: from ultra‑high‑cost Peninsula cities to relatively more affordable San Jose, Milpitas and south county.
Tech sector dynamics
- Core large‑cap tech firms remain profitable, but hiring has become more selective with waves of layoffs in 2022–2024.
- Office demand has softened with hybrid and remote work; this reduces some proximity premium but has not eliminated strong neighborhood school and amenity premiums.
- Compensation volatility in stock‑heavy packages increases cyclical swings in high‑end housing demand.
Interest rates and affordability
- Elevated mortgage rates have cooled transaction volume but inventory remains tight due to “locked‑in” low‑rate owners.
- Affordability is extremely stressed for first‑time buyers; down‑payment requirements are high given price levels.
Demographics
- Median age in the high‑30s supports strong move‑up buyer demand and family‑oriented purchases in high school‑quality zones.
- Large renter pool of young professionals supports sustained multifamily investment demand.
Quality‑of‑life drivers
- Top‑tier schools, climate, safety in certain suburbs, and global connectivity maintain base‑line demand even in downturns.
- Some buyers now prioritize space and affordability over workplace proximity, boosting demand in Morgan Hill, Gilroy and ex‑urban alternatives.

Key challenges on the housing market

Affordability and inequality
- Median home prices remain multiple times higher than U.S. averages; price‑to‑income ratios are stretched, especially for new entrants.
- Rent burden is severe for lower‑income households, contributing to overcrowding and displacement risks.
- Growing income inequality between tech‑sector households and service‑sector workers exacerbates spatial segregation.
Chronic undersupply
- Long‑term construction has lagged job growth, especially in earlier tech booms, creating a structural shortage.
- Even recent upzoning and TOD projects are insufficient to materially close the gap over the medium term.
Regulatory and political friction
- Local opposition to density, parking reductions and height remains strong in many municipalities.
- State–local tensions over RHNA allocations and enforcement create uncertainty for both cities and developers.
Economic cyclicality
- Housing demand and high‑end pricing are tightly linked to tech hiring cycles, IPO windows and stock‑market valuations.
- Downturns can lead to sharp but usually temporary slowdowns in transaction volume and price growth.
Infrastructure and quality‑of‑life pressures
- Congestion, aging infrastructure, and limited transit capacity reduce the effective size of the housing search area for many workers.
- Homelessness and visible disorder in some urban cores impact perceived neighborhood quality and investor sentiment.
Climate and environmental risks
- Wildfire smoke, drought and heat events pose growing medium‑term risks, especially near wildland–urban interfaces in hills and south county.
- Bayfront areas must manage long‑term sea‑level and flood‑risk mitigation, affecting regulatory and infrastructure costs.

Investment potential differences between areas/regions

Area	Appreciation potential	Risk	Key drivers
Palo Alto / Los Altos / Los Altos Hills	Moderate nominal, high real stability	Low	Global prestige, extreme supply constraint, top schools, high‑net‑worth buyer base; limited downside in downturns but already priced for perfection.
Cupertino / Saratoga / West San Jose high‑school zones	High over long run	Low to moderate	School quality, proximity to Apple and other employers, chronic lack of new SFH, strong immigrant demand; cyclical sensitivity to tech compensation.
Sunnyvale / Mountain View / Santa Clara	High	Moderate	Tech job density, transit and freeway access, ongoing multifamily intensification; some supply response via infill but demand remains deep.
Downtown and North San Jose	High but volatile	High	Large pipeline of high‑density projects, BART and transit investments, shift toward urban lifestyles; exposed to office market softness and pricing volatility in condos.
East San Jose (lower‑income tracts)	Moderate	Moderate to high	Relative affordability, potential for gradual upgrading and infill; risks around crime perception, school ratings and economic vulnerability of residents.
Almaden Valley / Evergreen (San Jose)	High	Low to moderate	Strong schools, suburban feel, limited new SFH, favored by established tech families; somewhat constrained by commute times.
Milpitas	Moderate to high	Moderate	BART access, ongoing multifamily and mixed‑use growth, gateway location; influenced by industrial land conversion and broader East Bay competition.
Morgan Hill	High (relative, from lower base)	Moderate	Space and relative affordability, family‑oriented communities, incremental new construction; sensitive to commute patterns, fuel costs and tech employment cycles.
Gilroy	Moderate	Moderate to high	Lowest entry prices in county, room for greenfield development; more cyclical, longer commutes, some dependence on agriculture and outlet retail.
Older rental‑heavy pockets (various cities)	Income‑driven more than price‑driven	High (regulatory and political)	Potential for value‑add via renovations and repositioning; but exposed to rent control, tenant protections and political risk; cap‑rate compression limits upside.

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