Friends,
Rates rebound, buyers are retreating, the Tech turbulence hits our Silicon Valley demand with layoffs, weaker job security, and here's how the buyer pool has changed. But first...
Market Update
Quite some time has passed since the last such update because we’d hoped for a quieting of the noise from the Middle East, yet at the time of writing, which is several weeks before you’ll receive this, the Strait of Hormuz is still closed and nearly a billion barrels of oil supply already lost. Even if traffic through the Strait were to resume tomorrow, we’d be surprised if there weren’t clear inflationary consequences globally and, to a lesser extent, nationally.
Nevertheless, housing is what we care about and the story right now in housing is buyer sentiment. We entered the year with fewer active buyers than prior years and with a more cautious and deliberative buyer pool and now, with mortgage rates rebounding upwards after a welcome early-year decline, we are seeing unmistakable signs of additional homebuyer demand erosion. In past years, with rates at current levels and the S&P and Nasdaq holding strong, we’d typically see heavy visitor traffic and regular “bidding wars” for quality homes, yet Zillow page views for South Bay home listings, open house visitor traffic, private showings, disclosure package downloads, and, yes, offers are all materially down both from their early-2026 levels and year-over-year. Zooming out, the S&P 500 recently hit an all-time high, just as consumer sentiment registered an all-time low — the widest gap in 50+ years of data between what Wall Street is pricing and how Main Street is feeling. Nationally, housing demand tracks this generalized consumer sentiment malaise, with NAR Pending Sales data hitting its lowest ever level for the month of March, even lower than 2008-09, and mortgage applications down more than 50% from their pandemic peak. The story nationally is consistent with the story here: fewer and more cautious homebuyers.
Alarmism isn’t our intent. Although our current market conditions are softer than in recent years, most homeowners in other regions would gladly trade their housing conditions for ours. Why? We have unique constraints on supply (geography, density, Prop 13, etc.) that hedge our downside exposure. That isn’t changing. The story is weakening demand and, more specifically, weakening demand from our largest pool of homebuyers, those working at local tech companies. This has little to do with oil or the Middle East conflict. In short, tech layoffs are biting, workforces continue to shrink, and those employees who survived the initial rounds of cuts have less job security and increasingly view a multi-million dollar home purchase as a more risky proposition.
Again, our housing market remains much stronger than most other large markets, but it takes more time, more effort, more patience, and more skill to sell a home and achieve a standout result under current market conditions. If you want clarity on how your property should fare in this market climate or on which updates are worth making and which aren’t, we’re happy to provide a no-nonsense assessment. We can also help you with strategies to significantly reduce capital gains taxes without a 1031 exchange, as we’re currently helping multiple home sellers do the same.
Feel free to reach out to Tim and Ryan directly at (408) 857-5153.
Result results...
cell: 408.857.5153
website: tim​andryan.com
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