Homebuyers watching San Jose real estate saw single-family prices drop 2.4 percent from a year earlier in August, settling at $1.8 million according to Homes.com data. National prices rose 1.3 percent over the same stretch, Los Angeles edged up 1.5 percent, and San Francisco jumped 8.6 percent. Sales volume in San Jose also fell 8.3 percent, nearly double the national decline, while San Francisco recorded a 9.8 percent increase in transactions.
Nigel Hughes of CoStar and Homes.com attributed the divergence largely to supply and demand differences. San Jose carried more higher-end homes on the market with fewer buyers competing for them. San Francisco, by contrast, held limited inventory in the neighborhoods attracting highly paid AI workers. “I just don’t think the intensity is anywhere near as strong down in San Jose,” Hughes said. Russell Hancock of Joint Venture Silicon Valley linked the softer hiring environment, partly tied to AI shifts, to reduced urgency in the local housing market even as technology continues generating substantial wealth at the top end.
Average earnings per technology job in the Bay Area reached roughly $450,000, according to comments from Beacon Economics’ Christopher Thornberg at San Jose State University’s Economic Summit earlier this year. Northern California AI companies raised $317 billion in venture funding this year, more than 11 times the amount in 2022. That capital has concentrated among top earners, enabling some San Francisco buyers to make all-cash offers that outpace mortgage-dependent purchasers. San Jose has not yet shown the same intensity. Hughes described the city as offering weaker demand and greater choice among higher-end properties.
Inventory in San Jose rose 9.3 percent from a year earlier while new listings increased 21.5 percent. After years of tight competition, the additional options have given buyers more room to negotiate and more leverage overall. The pattern sits against continued strength in Silicon Valley’s broader tech economy, with wealth creation flowing unevenly across the region’s housing markets.
Source: SVBJ
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