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San José's real estate market in September 2025 presents a complex landscape for potential buyers.
With median home prices reaching $1.5-$1.63 million and mortgage rates at 6.7%, the market requires careful consideration of your financial situation and long-term plans.
If you want to go deeper, you can check our pack of documents related to the real estate market in Costa Rica, based on reliable facts and data, not opinions or rumors.
San José remains one of the most expensive housing markets in the US, with moderate price growth and improving inventory levels.
While buying conditions have slightly improved for buyers, the market still favors sellers with properties selling above list price in most cases.
| Market Factor | Current Status | Trend |
|---|---|---|
| Median Home Price | $1.5M - $1.63M | Up 1.6-5% year-over-year |
| Active Listings | 2,087 properties | Rising from previous lows |
| Days on Market | 18-20 days typical | Slightly improved for buyers |
| Mortgage Rates | 6.7% (30-year fixed) | Stable around 6-7% range |
| Median Rent | $2,927-$3,289/month | Rising 2% year-over-year |
| Property Tax Rate | 1.46% of assessed value | Stable |
| Market Competition | 52% sell above list price | Moderating from peaks |
What's the current average price of homes in San José?
The median home price in San José as of September 2025 is approximately $1.5 million to $1.63 million.
This makes San José the most expensive metropolitan area in the United States for homebuyers. The average (mean) home values cluster around this range across multiple market sources.
These prices reflect the premium nature of Silicon Valley real estate, driven by the concentration of high-paying tech jobs and limited housing supply. Single-family homes in desirable neighborhoods like Willow Glen, Almaden Valley, and West San José typically command prices well above the median.
Condominiums and townhomes generally start around $800,000 to $1.2 million, while luxury properties in prime locations can exceed $3-5 million.
How fast are property prices rising or falling right now?
San José property prices are currently rising at a moderate pace of 1.6% to 5% year-over-year as of September 2025.
This represents a significant slowdown from the rapid price appreciation seen in previous years. The pace of growth has stabilized as the market adjusts to higher interest rates and improved inventory levels.
Most properties are holding their value or experiencing modest appreciation rather than the double-digit gains seen during the pandemic boom. Different property types are showing varied performance, with single-family homes generally outperforming condominiums.
The moderation in price growth suggests the market is finding a more sustainable equilibrium between supply and demand.
What's the current level of housing inventory in the market?
As of late July 2025, there were approximately 2,087 active listings in the San José metropolitan area.
This represents a notable increase compared to the ultra-low inventory levels of previous years. However, inventory remains relatively tight compared to national averages and historical norms for the region.
The improved inventory means buyers have more options to choose from, though competition remains significant for well-priced properties in desirable locations. New construction continues to lag behind demand, keeping overall supply constrained.
Seasonal patterns still affect inventory, with more listings typically appearing during spring and summer months.
How competitive is the market in terms of bidding wars and days on market?
The San José real estate market remains competitive, though conditions have moderated somewhat from previous peaks.
| Market Metric | Typical Properties | Hot Properties |
|---|---|---|
| Sale Price vs List Price | 2% above list | 5-6% above list |
| Days on Market | 18-20 days | 9 days |
| Multiple Offers | Common but less intense | Highly competitive |
| Homes Selling Above List | 52% overall | 90%+ typically |
| Buyer Inspection Period | Often waived or shortened | Frequently waived |
| Financing Contingencies | Standard but competitive | Cash offers preferred |
| Negotiation Power | Limited for buyers | Seller's market |
What are interest rates like at the moment, and are they expected to change soon?
As of September 2025, 30-year fixed mortgage rates are at 6.7%, with most lenders quoting between 6.6% and 7.0%.
15-year fixed loans are available at approximately 6.2%. These rates have declined from their late-2023 peaks of around 8% but remain significantly higher than the sub-3% rates seen during the pandemic.
Industry forecasts suggest rates will likely hover in the 6-7% range for the remainder of 2025. The Federal Reserve's monetary policy decisions will continue to influence mortgage rate direction.
Rate volatility remains a factor, with weekly fluctuations of 0.1-0.3% being common based on economic data and market conditions.
How much could I afford to borrow with today's mortgage rates?
With current mortgage rates at 6.7%, borrowing capacity is significantly reduced compared to the low-rate environment of recent years.
For a typical San José median home priced at $1.63 million with a 20% down payment ($326,000), you would need to finance approximately $1.3 million. The monthly principal and interest payment would be about $8,400.
Most lenders require that total housing costs (including property taxes, insurance, and HOA fees) not exceed 28-31% of gross monthly income. With San José property taxes at 1.46% and insurance costs, total monthly housing costs could reach $10,000-$11,000.
This means you would need a gross household income of approximately $310,000-$350,000 annually to qualify comfortably for a median-priced home.
It's something we develop in our Costa Rica property pack.
What's the rental market like—are rents going up or down?
The San José rental market shows continued upward pressure with median rents ranging from $2,927 to $3,289 per month as of September 2025.
One-bedroom apartments typically rent for $2,900-$3,265 monthly, while two-bedroom units average around $3,500. Rents are rising at approximately 0.7% month-to-month or 2% year-over-year.
San José maintains some of the highest rental costs nationwide, reflecting the strong local economy and limited housing supply. The rental market benefits from tech workers who prefer flexibility or cannot afford to purchase homes.
Rental vacancy rates remain low, giving landlords pricing power and making it challenging for tenants to negotiate lower rents.
How's the overall economy and job market in San José right now?
The San José economy remains robust, particularly in the technology sector, though some volatility has emerged in 2025.
The tech sector experienced 15.9% job growth in 2025, with median tech salaries ranging from $142,931 to $206,000. Key employers include Google, Apple, Meta, and numerous startups that continue to drive economic activity.
However, the unemployment rate has increased to 4.9% in San José and 5.5% statewide in California, indicating some cooling in the job market. This reflects ongoing adjustments in the tech sector following previous years of rapid expansion.
Healthcare, education, and professional services sectors provide economic diversification beyond technology. The region's innovation ecosystem continues to attract talent and investment despite periodic market corrections.
What are property taxes and other ongoing costs I need to factor in?
Property ownership costs in San José extend well beyond the mortgage payment and require careful budgeting.
1. **Property Taxes**: Effective rate of 1.46% of assessed value, resulting in annual taxes of $8,329-$8,590 for median-priced homes2. **Homeowners Insurance**: Approximately $1,200-$2,000 annually depending on coverage and property value3. **Maintenance and Repairs**: Budget 1-2% of home value annually ($15,000-$32,000 for median homes)4. **HOA Fees**: Can range from $200-$800+ monthly for condominiums and planned communities5. **Utilities**: Higher than national average due to California energy costs, typically $200-$400 monthlyAre there any major city developments, infrastructure projects, or zoning changes coming?
Several significant developments are reshaping San José's real estate landscape and future growth potential.
Google's Downtown West project represents an 80-acre mixed-use development near Diridon Station, bringing offices, residential units, retail space, and public amenities. This massive project will significantly impact downtown property values and urban density.
The BART Silicon Valley Extension continues progressing, providing rapid transit connectivity that typically boosts property values within walking distance of stations. This infrastructure improvement enhances the region's transportation network.
Office-to-residential conversions are gaining momentum, including projects like CityView Plaza, which will add apartment and condominium inventory to downtown areas. These conversions help address housing shortages while repurposing underutilized commercial space.
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What do local experts or agents say about short-term versus long-term outlooks?
Real estate professionals in San José maintain cautiously optimistic perspectives for both short-term and long-term market conditions.
For the short-term outlook through late 2025, experts forecast modest price appreciation of 2-4% or price stability rather than significant corrections. Improved inventory levels provide more buyer options, though the market likely remains seller-favored due to persistent demand.
Long-term projections remain positive, driven by the region's strong economic fundamentals and population growth. Major infrastructure developments and the continued concentration of high-paying tech jobs support sustained demand for housing.
Most experts emphasize that renting remains more cost-effective for newcomers or those with flexibility needs, while buying makes financial sense for buyers with secure, high incomes planning to stay 7-10 years minimum.
Does buying now fit well with my personal financial situation and future plans?
The decision to buy in San José's current market depends heavily on your specific financial position and life circumstances.
**Consider buying if you have:**1. A secure, high-paying job (ideally $300,000+ household income)2. Substantial down payment savings (20% = $300,000+ for median homes)3. Plans to stay in the area for at least 7-10 years4. Stable debt-to-income ratio with room for housing costs5. Emergency fund beyond your down payment**Consider renting if you:**1. Need geographic or career flexibility2. Don't have sufficient down payment or income stability3. Are uncertain about long-term Bay Area plans4. Prefer to invest excess cash in other assets5. Want to avoid maintenance and property tax obligations
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How do mortgage pre-approval and financing options look right now?
Mortgage pre-approval in San José's high-cost market requires thorough financial documentation and substantial income verification.
Lenders typically require debt-to-income ratios below 43% for conventional loans, though some portfolio lenders may accept higher ratios for well-qualified borrowers. Asset verification becomes crucial given the large down payment requirements.
Jumbo loan programs dominate the San José market since most home prices exceed conventional loan limits. These loans often require larger down payments (20-25%) and have stricter credit score requirements (typically 700+).
Cash offers remain competitive advantages, with approximately 25-30% of purchases completed without financing contingencies.
What about investment potential and rental yields?
San José's investment property market offers modest rental yields but strong long-term appreciation potential.
Gross rental yields typically range from 2.5% to 4% annually, which is relatively low compared to national averages but reflects the area's price appreciation expectations. Single-family homes in good school districts tend to command premium rents and attract stable tenants.
The strong rental demand from tech workers, particularly those preferring flexibility or unable to purchase, provides consistent tenant pools. However, California's tenant protection laws and rent control considerations affect landlord returns.
Investment success depends heavily on property selection, financing terms, and long-term holding strategies rather than short-term rental income.
It's something we develop in our Costa Rica property pack.
Conclusion
This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.
San José's real estate market in September 2025 presents a challenging but potentially rewarding opportunity for well-prepared buyers.
While prices remain at historic highs and mortgage rates have increased significantly, the market shows signs of stabilization with improved inventory and moderated competition, making it essential to align any purchase decision with your long-term financial capacity and geographic commitment to the Bay Area.
Sources
- Redfin San Jose Housing Market
- Norada Real Estate San Jose Market Analysis
- SmartAsset Most Expensive Housing Markets 2025
- CNBC Most Expensive US Cities
- Federal Reserve Economic Data Active Listings
- Total Mortgage San Jose Rates
- Apartments.com San Jose Rent Trends
- Joint Venture Silicon Valley State of the Valley 2025
- Ownwell San Jose Property Tax Trends
- BlockChange Real Estate Market Forecast