- Lisa M. Lum, REALTOR®
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California’s 2026 Real Estate Outlook
As the year draws to a close, the conversation is shifting toward what’s next for California’s housing market. The latest statewide forecast points toward a year of balance and quiet recovery, a return to stability after several years of volatility.
A Measured Economic Landscape
The U.S. economy is projected to move at a sustainable pace in 2026, a welcome shift after the highs and lows of recent years.
GDP Growth: 1.0%
Job Growth: 0.3%
Unemployment: 4.6%
Inflation: 3.0%
Disposable Income: Gradually rising
In essence, economic conditions remain healthy. Growth continues, though at a more deliberate pace, setting the stage for a stable housing environment.
California Housing Forecast
Next year is projected to bring subtle yet meaningful progress for the state’s real estate market:
Home Sales: Rising 2% to approximately 274,000
Median Home Price: Increasing 3.6% to around $905,000
Mortgage Rates: Easing to an average of 6.0%
Affordability: Holding near 18%, underscoring persistent demand despite limited accessibility
These figures point to a marketplace that continues to reward patience and preparation, where thoughtfully priced homes and qualified buyers meet on steadier ground.
For Bay Area homeowners, this means sustained property value and continued buyer interest. For those looking to purchase, small rate drops could make a big difference in affordability, especially in high-demand cities like Menlo Park, Palo Alto, Burlingame, and Los Altos.
Observations from the Field
Across San Mateo County and Santa Clara County, the shift toward balance is clear. Long-time homeowners are re-entering the market, taking advantage of strong equity and consistent pricing.
Meanwhile, buyers in Silicon Valley and the Peninsula are approaching the market with strategy; securing financing early, submitting competitive offers, and often paying all cash. The market remains active, but with more room for thoughtful negotiation and opportunity on both sides.
Looking Ahead
The coming year is not expected to bring dramatic swings. Instead, it offers a more composed rhythm. Modest appreciation, gradual rate relief, and a renewed sense of confidence among both buyers and sellers define the outlook.
For those considering a move in 2026, now is the time to position strategically. Preparation, timing, and expertise will distinguish the most successful transactions in the year ahead.
OCTOBER REPORT
San Mateo County - Market Housing Statistics
Single Family Residential | October 2025
Santa Clara County - Market Housing Statistics
Single Family Residential | October 2025
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Lisa M. Lum
DRE #02005150
Mobile: +1 (650) 668-1868 | Email: [email protected]
Coldwell Banker Realty
1706 El Camino Real, Suite 220, Menlo Park, CA 94027
