Are Home Prices Dropping in San Jose? Latest Data & Neighborhood Insights

For buyers and sellers alike, the key question in mid-2025 is: Are home prices really dropping in San Jose? With headlines of cooling Bay Area markets, it’s crucial to dive into the numbers, not just anecdotes. This article covers:

1. Citywide price trends: median and average sale price movements

2. Supply & demand metrics: inventory levels, pending-to-active ratios, days on market

3. Neighborhood breakdowns: Evergreen (95123), Silver Creek (95138), Almaden (95120)

4. Underlying factors: mortgage rates, tech employment shifts, ADU policies

5. Outlook & strategy for buyers and sellers

By grounding our analysis in the latest data, you’ll know whether to list, hold, or act decisively on a new purchase.

1. Citywide Price Trends

1.1 Median Sale Price Movements

• May 2024: $1,515,000

• May 2025: $1,499,000 (–1.1% YOY)

Interpretation: A modest year-over-year dip, but still within a narrow range. Historical context shows median prices rose over 10% annually 2020-2022, so a 1% pullback marks stabilization rather than collapse.

1.2 Average Sale Price

• May 2024: $1,650,000

• May 2025: $1,620,000 (–1.8% YOY)

Note: A small drop in average prices suggests higher-end sales cooling slightly more than entry-level homes.

1.3 Month-to-Month Fluctuations

• April to May 2025: –0.3%

• March to April 2025: +0.5%

Takeaway: Seasonal spring upticks are muted; prices oscillate within a tight band, showing neither steep declines nor rapid gains.

2. Supply & Demand Indicators

2.1 Active Inventory

• Active Listings (May 2025): 1,250 homes (~1.0 month of supply)

• Active Listings (May 2024): 1,100 homes (~0.9 months supply)

Analysis: Slight increase in listings—6% YOY—offering buyers marginally more choice, but still a deep seller’s market benchmark (<2 months supply).

2.2 Pending-to-Active Ratio

• Pending Contracts: 1,900

• Active Listings: 1,250

• Ratio: 1.52

Context: A ratio above 1.2 indicates buyer demand remains strong relative to supply, supporting stable prices.

2.3 Days on Market (DOM)

• Average DOM (May 2025): 15 days

• Average DOM (May 2024): 12 days

Insight: Slightly longer market times reflect buyer caution, but sub-3-week DOM still signals healthy demand.

3. Neighborhood Deep Dive

3.1 Evergreen (95123)

• Median Price: $1,480,000 (–0.7% YOY)

• Supply: 0.8 months

• DOM: 13 days

• Trend: ADU-friendly lots maintain investor interest, offsetting any softening.

3.2 Silver Creek (95138)

• Median SFR Price: $1,320,000 (–2.2% YOY)

• Median Condo Price: $1,270,000 (–3.1% YOY)

• Supply: 1.1 months

• DOM: 16 days

Observation: Silver Creek shows larger YOY declines, especially condos, as move-up buyers pause and condo-to-SFR competition intensifies.

3.3 Almaden Valley (95120)

• Median Price: $1,650,000 (+0.5% YOY)

• Supply: 0.7 months

• DOM: 11 days

Explanation: Almaden’s top schools and hillside views keep prices resilient despite overall cooling.

4. Underlying Market Drivers

4.1 Mortgage Rate Dynamics

• Current Rates: ~6.5% for 30-year fixed

• 12-Month Change: +1.0% rate increase has sidelined some marginal buyers, tempering price growth.

4.2 Tech Employment Trends

• Hiring Slowdown: Major Bay Area employers report flat headcount YOY, reducing urgency for relocation purchases.

• Remote Work: Many tech workers remain in place, sustaining local demand but slowing new-hire influx.

4.3 ADU & Zoning Policies

• ADU Permits: +15% YOY in San Jose

• Impact: Sellers highlight potential rental income, attracting investor segments even as traditional buyer pool softens.

4.4 Seasonal & Macro Factors

• Summer Lull: June-August typically sees fewer transactions as families focus on vacations.

• Inflation & Wage Growth: Household budgets tighten; price appreciation aligns more with wage gains (3–4%) rather than double-digit hikes.

5. What Buyers & Sellers Should Do

5.1 For Sellers

• Price Near Comps: Avoid over-pricing; stay within 1% of comparable sales to maintain quick DOM.

• Highlight ADU Potential: Especially in Evergreen and Berryessa to appeal to investors.

• Flexible Terms: Offer 25-day escrow and pre-inspection credits to attract cautious buyers.

5.2 For Buyers

• Get Pre-Approved: A strong POF at current rates positions you ahead in multiple offers.

• Target Pockets: Almaden and select Evergreen blocks where prices hold firm.

• Negotiate Inspections: Use small contingencies to get slight price reductions in condos like Silver Creek.

Conclusion

Are home prices dropping in San Jose? The data shows modest year-over-year dips of 1–3% in citywide and micro-markets like Silver Creek, while top-tier neighborhoods like Almaden remain stable or up slightly. Inventory is rising marginally, DOM is lengthening—but supply remains tight and demand robust.

For sellers, timing and pricing carefully allows you to capitalize on continued buyer competition; for buyers, strategic targeting and strong financing are keys to success. Block Change Real Estate’s hyperlocal insights ensure you make informed decisions—whether you’re listing your Evergreen home, eyeing a Silver Creek condo, or expanding your Almaden portfolio. Ready to navigate these nuanced trends? Let’s connect and chart your best move in San Jose’s evolving market.