As we enter the heart of the 2025 real estate season, the Bay Area market continues to evolve in fascinating ways. Mortgage rates remain elevated, buyer competition persists in select areas, and inventory is finally building. Below is a comprehensive breakdown of the latest trends, with a focus on Santa Clara and San Mateo counties.
🧾 Mortgage Rates: High but Stabilizing
As of June 5, 2025, the average 30-year fixed mortgage rate sits at 6.85%, per Freddie Mac. While the Fed began cutting its benchmark rate in late 2024, mortgage rates have not fallen as quickly as many hoped.
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Peak rate in the past 2 years: 7.79% (Oct. 2023)
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Recent low: 6.19% (Feb. 2023)
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Spring 2025 trend: Mortgage rates held firm, impacted by a financial market dip triggered by April’s tariff shock
This has kept affordability constrained, particularly for entry-level buyers.
🏡 Median Home Prices: Santa Clara Surpasses San Mateo
For the first time in more than two decades, Santa Clara County has overtaken San Mateo County as the most expensive housing market in the Bay Area by median price.
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Santa Clara (May 2025): $2,050,000 (+6% YoY)
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San Mateo (May 2025): $1,950,000 (–3% YoY)
Santa Clara’s surge has been driven mainly by substantial tech-sector income, AI-driven job growth, and equity-fueled buying power.
📈 Appreciation Trends: 2020 to 2025
🛏 By Bedroom Count
Larger homes have outperformed those in smaller homes across both counties, reflecting continued demand from high-income buyers.
Santa Clara County:
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4+ Bedrooms: +63%
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3 Bedrooms: +46%
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2 Bedrooms: +36%
San Mateo County:
- 4+ Bedrooms: +36%
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3 Bedrooms: +24%
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2 Bedrooms: +10%
🏘 By Property Type
Single-family homes remain the top-performing asset class.
Santa Clara County:
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Houses: +55%
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Townhomes: +40%
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Condos: +10%
San Mateo County:
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Houses: +35%
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Townhomes: +10%
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Condos: ~0%
💲 Price per Square Foot (Santa Clara – May 2025)
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Single-Family Home: $1,120 (+5% YoY)
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Townhome: $860 (–3% YoY)
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Condo: $730 (–4% YoY)
While houses hit a new all-time high, attached home values declined modestly year over year.
🏘 Inventory Growth – Signs of Seller Activity
Total Listings (as of June 1, 2025)
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Santa Clara: 2,312 active listings (+35% YoY)
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San Mateo: 1,054 active listings (+34% YoY)
Santa Clara County Breakdown:
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Houses: 61% (≈1,411)
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Condos: 24% (≈555)
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Townhomes: 15% (≈346)
San Mateo County Breakdown:
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Houses: 66% (≈696)
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Condos: 27% (≈285)
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Townhomes: 7% (≈74)
🔻 Price Reductions Spike
A growing gap between seller expectations and buyer willingness has led to a rise in price reductions.
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Santa Clara: 660 reductions in May 2025 (+88% YoY)
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San Mateo: 245 reductions (+60% YoY)
These are the highest May counts in more than 5 years for both counties.
💰 Buyer Competition: Overbidding Returns
Despite higher rates, bidding wars are far from gone. In fact, overbidding peaked again this spring.
May 2025 Overbidding Rates:
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Santa Clara: 61% of sales closed over asking
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Houses: 65%, Condos: 39%
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San Mateo: 60% of sales closed over asking
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Houses: 65%, Condos: 33%
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Homes priced correctly continue to attract strong offers, especially in core neighborhoods and top school districts.
🆕 New Listings in Santa Clara
Santa Clara saw a muted spring listing surge:
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March 2025: 1,660 new listings
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April 2025: 1,530 listings
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May 2025: 1,450 listings (flat YoY)
This suggests some sellers are still holding back, unsure of market timing.
📝 Final Thoughts
The market is balancing between rising inventory and stubbornly high mortgage rates. Santa Clara continues to lead in price growth and buyer demand, while San Mateo shows signs of softening.
If you're considering buying, selling, or want to understand your home's value in this shifting market, let’s connect. We’re always happy to provide a personalized strategy based on real-time data and your unique goals.
