Inside the San Jose Real Estate Market in 2025: High Prices, Mixed Signals, Real Decisions

If you only skim headlines, the San Jose real estate market looks like a paradox.

Prices are “cooling” but still sky-high. Inventory is “up,” yet the best homes still disappear in days. Affordability is “improving” in national reports, while local buyers feel more stretched than ever.

San Jose is still one of the most expensive and least affordable housing markets in the country, with metro-level median resale prices around $1.9M and a local median sale price near $1.44M as of fall 2025. The average San Jose home value hovers around $1.38M, down a few percent year-over-year, and yet typical homes still go pending in roughly 17–18 days.

From a distance, that sounds like a healthy, high-priced market. Up close, it’s more complicated. As local real estate professionals, we’re not just chart-watching—we’re in the living rooms, listing appointments, and inspection reports where the real story plays out.

Task number 4 (Market Research …

Here’s a clear-eyed look at the San Jose real estate market right now—what’s actually happening, what’s just noise, and what it means for buyers and sellers who have to make real decisions, not just read about them.

1. The Numbers: A Market on a High Plateau

Let’s start with the stats behind all the opinions.

Recent data shows:

• Median sale price (San Jose city): about $1,435,000, up 1.6% versus last year.
  
  

• Average home value (Zillow): roughly $1,385,000, down about 2.8% year-over-year.
  
  

• Time to sell: typical homes go pending in 17–18 days within San Jose, and about 16 days at the broader metro level.
  
  

• Metro pricing: in the wider San Jose–Sunnyvale–Santa Clara metro, the median existing single-family price sits near $1.9M, up around 0.8% year-over-year.
  
  

So no, this is not a crash. It’s more of a high-altitude plateau:

• Prices are nudging up or down a few percentage points depending on neighborhood and property type.
  
  

• Transaction speed is slower than the 2021 frenzy, but still much faster than most U.S. markets.
  
  

For buyers hoping to “wait out” a big correction, the data so far hasn’t cooperated. For sellers expecting pandemic-level bidding wars, the market is gently but firmly saying, “Not anymore.”

2. Affordability: Still the Market’s Biggest Red Flag

Here’s where the critic in me has to be blunt: affordability is still the fundamental problem in San Jose.

Nationally, the median new home price is around $410,800, based on a median income just over $104,000. In that world, the old “30% of income” rule at least feels plausible on paper.

San Jose is playing an entirely different game:

• Recent analyses continue to rank San Jose as one of the least affordable metros in the country.
  
  

• At the same time, other studies note that San Jose and San Francisco still land among the “top 20 most affordable” once high incomes are factored in—median housing payments are around $2,800, and roughly 55.5% of San Jose households are homeowners.
  
  

Both things can be true:

• If you already own (and locked in a low rate), you are insulated and often sitting on sizable equity.
  
  

• If you’re trying to enter the market, the combination of prices and rates makes the monthly payment feel brutal—even by Bay Area standards.
  
  

From the ground, that looks like:

• More buyers asking, “What’s my maximum comfortable payment?” rather than “What’s my maximum pre-approval?”
  
  

• More couples exploring ADUs, lower-level suites, or multi-generational living to make ownership work.
  
  

• More quiet conversations about whether staying in San Jose long-term actually lines up with financial and lifestyle goals.
  
  

3. One City, Many Markets: Micro-Trends by Zip Code

Talking about “the San Jose market” as one thing is like describing all of Silicon Valley with one job title. The micro-trends by zip code tell a more honest story:

• 95124 (Cambrian / border areas): median price around $2.01M, up 7.6%, with homes selling in roughly 15 days
  
  

• 95118 (Blossom Valley / Cambrian South): median price about $1.69M, up 4.3%, and 19 days on market.

• 95131 (North Valley / Berryessa): median price near $1.37M, up 6.9%, with 18 days on market.
  
  

• 95117 (West San Jose): median price around $1.65M, up 2.4%, and 29 days on market.
  
  

• 95116 (parts of East/Central San Jose): median price roughly $905K, actually down 5.7%, with homes selling in about 26 days.
  
  

Same city, wildly different micro-climates:

• Family-friendly, high-demand pockets like Cambrian and parts of Blossom Valley are still seeing strong appreciation and quick sales.
  
  

• Transitional or historically more affordable areas show a mix of softening, sideways movement, or gentle appreciation.
  
  

For serious buyers and sellers, this is the point where generic headlines stop being useful. Your zip code, school boundary, and product type matter more than the “San Jose average.”

4. Luxury vs. Everyone Else: The Wealth Gap in Real Time

Another defining feature of the 2025 market: a widening gap between luxury and everything below it.

Recent Bay Area reporting shows:

• Across the region, most mid-tier homes have lost a bit of value or stayed roughly flat.
  
  

• Luxury homes—the top 5% by price—have surged, especially in AI-and-tech-adjacent areas.
  
  

• In the San Jose metro, the median luxury home price sits around $5.6M, up roughly 12% in a recent three-month window—one of the strongest luxury gains in the country.
  
  

Why?

• Cash-rich buyers who benefited from stock market and AI-sector gains are less rate-sensitive.
  
  

• They often skip financing altogether or use smaller loans, making today’s mortgage rates a footnote rather than a dealbreaker.
  
  

• Ultra-scarce, high-end inventory means small shifts in demand create big moves in price.
  
  

Meanwhile, the mid-market and condo segments are where you see more negotiating, more price sensitivity, and more hesitation—especially for properties with high HOAs or costly deferred maintenance.

In other words, the San Jose market is functioning beautifully if you’re sitting on large financial assets. For everyone else, it’s much closer to a maze.

5. Price Cuts, Delistings, and the New Psychology of Selling

One of the more interesting 2025 shifts is how sellers react when reality doesn’t match their expectations.

Nationwide, a new Zillow-based analysis found that buyers are capturing record discounts thanks to rising price cuts; expensive markets lead the pack. San Jose currently shows one of the largest median individual price cuts—around $49,000—when sellers reduce their asking price.

At the same time:

• Across the U.S., tens of thousands of sellers are pulling listings rather than accepting significantly lower offers, with recent delisting rates hitting multi-year highs.
  
  

On the ground in San Jose, the pattern is clear:

• Homes priced correctly from day one still sell relatively quickly, and often with at least some competition.
  
  

• Homes priced to chase yesterday’s peak tend to:
  
  

• Linger on the market
  
  

• Collect public price cuts
  
  

• Eventually sell for less—or not at all—once buyers start asking, “What’s wrong with this property?”
  
  

That doesn’t mean you have to give your home away. It does mean that in 2025, buyer psychology is less forgiving. Overpricing is no longer seen as “just trying”; it’s read as a red flag.

6. How Buyers Can Navigate This Market Without Burning Out

From a buyer’s perspective, San Jose is still one of the toughest markets in the country, but not a hopeless one. Here’s how successful buyers are approaching it:

1. Start with the payment, not the price.
With national benchmarks showing a median U.S. home around $410K and San Jose’s closer to three to four times that, the monthly cost is where reality hits. The right question isn’t “How high will the bank let us go?” but “What payment lets us sleep at night and still live our lives?”

2. Zoom in on micro-markets.
Given the spread between, say, 95124 and 95116, smart buyers identify a shortlist of neighborhoods and track their stats—list-to-sale ratios, days on market, and price cuts—rather than relying on citywide averages. 

3. Look for properties with built-in flexibility.
Homes with potential for an ADU, a rentable lower level, or multi-generational layouts can soften the long-term financial burden and create exit options if your life changes.

4. Use the leverage you do have, carefully.
This isn’t 2021. It’s now reasonable to:

• Ask for credits or rate buydowns
  
  

• Negotiate repairs after inspections
  
  

• Walk away from overpriced listings
  
  

But on truly “A+” homes that are priced right, trying to lowball in the name of “the market is slowing” is a good way to lose a house to someone more realistic.

7. What Sellers Need to Hear (Even If It’s Uncomfortable)

For sellers, San Jose is still a powerful market—but not a magical one. The most successful sellers in 2025 are doing three things differently:

1. Pricing with the market, not above it.
With metro medians still around $1.9M but city-level averages softening at the edges, buyers are very aware of value. Correct pricing means:

• Using the most recent closed comps, not just peak-era sales
  
  

• Adjusting for condition, location, and layout realistically
  
  

• Recognizing that starting high and “seeing what happens” often leads to public price cuts and skepticism
  
  

2. Treating marketing like a serious investment, not an afterthought.
In a world where buyers meet your home first on their phone, sellers who invest in:

• Professional staging
  
  

• High-quality photography and video
  
  

• Clear, lifestyle-driven descriptions
  
  

consistently outperform those who wing it. The bar is higher now, especially in markets where every listing is competing with slick, tech-enabled presentations.

3. Being ready to negotiate terms, not just price.
Credits toward closing costs, flexible move-out timelines, and minor repairs can be the difference between a deal closing smoothly and an escrow falling apart over principle. Remember: many buyers are stretching; small gestures can keep them at the table.

Conclusion: Real Decisions in a High-Price, High-Pressure Market

San Jose’s 2025 housing market isn’t a story of collapse—it’s a story of tension. Prices sit on a high plateau, micro-markets move in different directions, and the gap between luxury and everyone else continues to widen. On paper, the stats can be spun as “stable” or even “resilient.” But for real people trying to buy, sell, or simply stay put, the experience feels far less abstract: it’s about trade-offs, fatigue, and big life decisions that don’t come with perfect timing.

Affordability remains the core fault line. Existing owners with low rates and strong equity are, for now, on solid ground. But aspiring buyers and move-up families are navigating a landscape where even small changes in rates or prices materially change their options. At the same time, what you can do—and what you should do—depends less on “the San Jose market” and more on your specific zip code, school district, price band, and time horizon. This is no longer a market where broad headlines are enough to guide strategy.

For buyers, that means approaching the market with disciplined math, realistic expectations, and a focus on neighborhoods and homes that offer flexibility—not just status. For sellers, it means accepting that the days of automatic bidding wars are over, and that success now depends on accurate pricing, professional presentation, and a willingness to negotiate terms that keep good buyers at the table.

Ultimately, the San Jose real estate market in 2025 rewards clarity: clarity about your numbers, your priorities, your timeline, and your tolerance for risk. The noise will keep coming—“crash” narratives on one side, “always up” optimism on the other. The people who make the best decisions in this environment won’t be the ones chasing headlines; they’ll be the ones grounded in data, honest about their situation, and supported by advisors who are willing to tell them what’s really happening, not just what they hope to hear.