Housing Trends in San Jose, California: High Prices, Subtle Shifts, and a Market That Refuses to Break

San Jose’s housing market in 2025 is doing something that doesn’t make great headlines: it’s moving sideways at a very high altitude.

Home prices aren’t crashing, bidding wars aren’t as wild as 2021, and yet San Jose remains one of the most expensive, least affordable markets in the country. Recent data shows a median sale price around $1.4M, up about 1.6% year-over-year, with homes typically going under contract in about 18 days. At the same time, research still ranks the San Jose metro as one of the least affordable housing markets in the U.S., even as national home-price growth cools.

So what’s actually happening beneath those numbers? Let’s walk through the key housing trends in San Jose right now—looking at prices, demand, luxury vs. mid-market behavior, and where things may be heading next.

1. Prices on a High Plateau, Not a Cliff

The first trend is simple but important: San Jose prices have flattened, not fallen off a cliff.

• Redfin shows a median sale price of about $1.435M, up 1.6% from last year.
  
  

• Zillow’s broader home-value index pegs the “typical” home at roughly $1.39M, actually down about 2.8% year-over-year.
  
  

Two different methodologies, one clear message:

Prices have stopped sprinting upward, but they haven’t meaningfully “corrected” either.

For buyers, that means waiting for a dramatic discount hasn’t paid off yet. For sellers, it means the days of automatic double-digit appreciation are behind us—for now.

Instead, we’re looking at a high-altitude plateau: small gains or small dips depending on the neighborhood, but all on top of already steep prices.

2. Demand Is Softer—but Homes Still Move Fast

Another big trend: the market feels slower, but it’s not actually slow.

• Homes in San Jose go pending in about 17–18 days on average, according to both Redfin and Zillow.
  
  

• That’s a bit longer than last year’s ultra-tight 15-day pace, but still much faster than the national median, which now sits closer to 49 days on market.
  
  

• October saw 521 closed sales, slightly down from 539 a year earlier—so activity is cooler, not frozen.
  
  

In real life, that looks like this:

• Good homes in desirable pockets (Evergreen, Willow Glen, Almaden, parts of North San Jose) still attract serious attention and, sometimes, multiple offers.
  
  

• Homes that are over-priced, poorly presented, or compromised on location can sit—and those are the ones you see with big price cuts and longer days on market.
  
  

So yes, buyers have more breathing room than during the 2021 frenzy. But no, this is not a buyer’s market in the classic sense. It’s a selective market—fast for the right property, unforgiving for the rest.

3. A Split Market: Luxury Strength vs. Mid-Market Pressure

One of the most important trends shaping San Jose housing right now is the growing divide between luxury and everyone else.

Recent reporting shows that across the Bay Area, most mid-tier homes have lost a bit of value in the past year, while luxury properties—the top 5% by price—have gained. In fact, the San Jose metro’s luxury segment saw prices jump roughly 12%, with a median luxury price around $5.5M, making it the second-most expensive major metro for luxury homes in the country. 

What’s driving that?

• Cash-rich buyers tied to the AI and tech stock boom
  
  

• Less sensitivity to mortgage rates
  
  

• Limited, highly curated inventory at the top of the market
  
  

Meanwhile, the mid-market and condo segments are feeling the strain:

• Condos and townhomes with high HOA dues are under more pressure as buyers run into payment fatigue.
  
  

• Some “entry-level” zip codes like 95116 (East/Central San Jose) have seen double-digit year-over-year price gains, while others are flat or slightly down.
  
  

The net effect:

• If you’re shopping or selling at the very high end, you’re in a surprisingly strong mini-boom.
  
  

• If you’re in the middle of the market, you’re operating in a much more price-sensitive, cautious environment.
  
  

4. Price Cuts, Delistings, and the Psychology Shift

Another visible 2025 trend is the rise of price cuts and pulled listings.

Nationwide, more than a quarter of listings now see price reductions, and new Zillow research shows buyers are getting record-level discounts after cumulative cuts. Expensive metros lead that list: in San Jose, the typical total price reduction for homes that do cut is around $70,900—one of the largest discounts in the country. 

At the same time, thousands of sellers nationally are yanking their homes off the market rather than accepting lower prices, leading to the highest September delisting rate in years. 

In San Jose, the pattern looks like this:

• Sellers who price correctly from day one still often sell quickly, sometimes slightly over asking.
  
  

• Sellers who “test” the market with a pandemic-era fantasy price end up:
  
  

• Sitting on the market longer
  
  

• Making visible price cuts
  
  

• Sometimes delisting and trying again later
  
  

From a critic’s perspective, this is a market where overconfidence is expensive—for both sides. Buyers who assume they can lowball every listing miss out on well-priced homes; sellers who assume “it’s San Jose, it will sell no matter what” discover that buyers now have limits.

5. Affordability: Still the Elephant in the Room

Even as prices wobble slightly, affordability hasn’t really improved.

• Nationally, the typical U.S. home now costs about $440K, with affordability still stretched.
  
  

• In the San Jose area, some analyses peg the median regional home price around $1.6M, and multiple studies still rank San Jose among the least affordable metros in America.
  
  

Combine that with still-elevated mortgage rates and you get a simple reality:

For many households, the monthly payment is the real barrier now, not just the sticker price.

That’s pushing several trends beneath the surface:

• More creative house-hacking: buyers looking for homes with ADU potential, lower-level suites, or rental possibilities to offset payments.
  
  

• Longer hold times: existing owners sitting on 2–3% mortgages are reluctant to move and take on 6–7% rates, which keeps resale inventory lower than it would otherwise be.
  
  

• Lifestyle calculus: more families are quietly considering moving to the outer Bay Area or out-of-state markets where they can trade commute for space and financial breathing room.
  
  

6. New Construction, Forecasts, and the Next Few Years

Despite all the affordability friction, the long-term forecast for San Jose housing is still mildly upward, not downward.

A recent market outlook projects:

• New home sales in the San Jose area could climb about 10% in 2025 and another 5% in 2026
  
  

• Median home prices are forecast to rise roughly 3% in 2025 and 4% in 2026
  
  

That forecast lines up with what we see on the ground:

• More small infill projects, townhome communities, and ADU activity
  
  

• Continued demand from high-income households tied to tech and AI
  
  

• A chronic under-supply of truly affordable, entry-level product
  
  

In other words, even if we see short-term softening in specific segments, the structural forces behind San Jose housing—high incomes, limited land, strong job base—aren’t going away.

7. How Smart Buyers and Sellers Are Responding

Given these trends, how are savvy people actually navigating San Jose right now?

From the realtor side, the strategy has shifted from pure speed to precision and storytelling: clear pricing, sharp presentation, and neighborhood-specific guidance.

For buyers, the winning playbook looks like:

• Getting brutally clear on a sustainable payment, not just max pre-approval
  
  

• Being flexible on neighborhood or property type while staying firm on non-negotiables
  
  

• Watching micro-trends (like where days-on-market are creeping up) to find leverage
  
  

For sellers, the strongest results come from:

• Pricing with today’s comps, not yesterday’s peak
  
  

• Investing in staging, photography, and marketing that actually tells a story—not just “3 bed, 2 bath”
  
  

• Being realistic about concessions: credits, rate buydowns, or small repairs that keep serious buyers at the table
  

Conclusion:

San Jose’s housing market in 2025 isn’t crashing, and it isn’t roaring—it’s grinding forward at a very high level, with much less room for guesswork. Prices sit on a steep plateau, demand is selective instead of frenzied, and the gap between luxury strength and mid-market pressure keeps widening. Affordability remains the defining constraint, not a background issue, and it shapes everything from who can buy to how long people stay put. This is less a boom-or-bust story and more a test of strategy, realism, and staying power.

For buyers, that means the winning move is not waiting for a mythical “big drop,” but getting crystal clear on what you can comfortably afford and where you have leverage. For sellers, it means understanding that pricing, presentation, and timing matter more than ever—especially if you’re not in the ultra-luxury tier. Across all segments, the data points to the same truth: San Jose is still one of the most competitive and least forgiving markets in the country, just in a quieter, more nuanced way than the 2021 frenzy.

At Block Change Real Estate, we live inside this nuance every day—tracking micro-trends by neighborhood, watching how buyers respond to each price bracket, and seeing firsthand where expectations collide with reality. If you’re thinking about buying, selling, or just trying to make sense of your options over the next 12–24 months, you don’t need hype; you need clarity. Block Change Real Estate is here to help you read the numbers, understand the trade-offs, and build a plan that fits your life, not just the headlines. When you’re ready to talk about your next move in San Jose, Block Change Real Estate is ready to walk you through it—step by step, data first, no drama.