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Photo of Mary Pope-Handy, crystal ball, Mary's logo and the words "Mary's Predictions" - Silicon Valley real estate market predictionsSilicon Valley real estate market predictions – it’s time for an update!


  • Today we look at the question of What would have happened with our prices if we hadn’t had the pandemic?
  • It’s a mixed market, but if interest rates don’t continue their steep climb, my Silicon Valley real estate market predictions are that home prices would be fairly flat for the remainder of the year. Any given area could rise or fall a little, but I would not expect a huge change, as we are under the “high” projection based on the years of 2013 until right before the pandemic began.
  • We are seeing the market pick up as of mid August. Perhaps home buyers feel that sale prices have come down as far as they will?

We began this current year with wildly appreciating home prices. We believed or knew that if interest rates rose more than 1 point it could be a game changer. We didn’t foresee Russia invading Ukraine, the stock market taking a nosedive, or interest rates climbing so high, so fast.

Combined, they have shaved the top off of home prices in Santa Clara County and across the country. Our appreciation was steeper than most places. Will value adjustments be just as steep?

The super surge in home prices were part of the Covid package deal. I have been wondering something:

What would our Silicon Valley home prices be like today if we hadn’t had the coronavirus pandemic?

There are different ways of trying to assess this, but I decided to plot the trajectory from February 2013 (when our housing market recovery began in earnest) to Feb 1 2020 when our lives were turned upside down by Covid-19. Microsoft Excel has a forecast program and that’s what I used to create the chart below. I ran the projections through the end of this year and found the results to be interesting. What kind of real estate market predictions can we see if there hadn’t been Covid over these last 2.5 years?

The excel Silicon Valley real estate market predictions – high, medium, and low values:


SCC Market projections without Covid - Silicon Valley real estate market predictions data


If we used a different span of years, we would have a different result, of course. In 2018 we had peak pricing that wasn’t matched until the pandemic. If we had plotted this only from that high point, prices would have trended down, not up. My thinking was that more years after the Great Recession was likely to be more accurate. Please note all the ups and downs. People like to think that the market only moves one way or the other but that isn’t the case.

Excel’s “high projection” for August 1 2022 was $2,287,363. Our actual average sale price was lower at $2,140,354. The middle projection or the most expected one was at $1,811,066. That is substantially below where we are. The low value doesn’t make any sense to me: $1,234,758. That would be a rollback to late 2015 prices. I cannot imagine anything causing prices to reverse that much.

Let’s see where our actual peak was and the projected peak for 2022:


SCC Market projections without Covid and actual 2022 figures

The actual high point in Santa Clara County was in April and the average sale price then was $2,306,803. Excel’s high projection peak (the upper orange line) for 2022 was for an average sale price of $2,425,307 and it projected that it would be in July of 2022.

That said, Excel also doesn’t know about interest rates, the stock market’s ups and downs, or global affairs.

Even so, to me it’s a little comforting that our prices are below, and not above, the program’s “high” value in relation to the recent pre-pandemic years. It’s one thing to be on the high side of what may be normal for our area. It’s another to be higher than that.

What are the Silicon Valley real estate market predictions for the remainder of the year?

Here are a few quick points that I consider relevant to my best estimate of what to expect:

  • interest rates have climbed tremendously, but in the last week or two they’ve eased up
  • the stock market is still low, but has been recovering from the lowest points, and that is also helping home buyers
  • the worst of the inflation cutting measures may be over (we’ll have to see what the Fed does, and how lenders respond)
  • in many areas, home prices are about the same as a year ago.
  • the average home price is down about 10% from the peak of Spring 2022 (some homes more, some less)
  • inventory has not risen as much as anticipated, so buyers still don’t have an oversupply to choose from
    • move up sellers don’t want to sell a house with a 3% mortgage and buy one with a 5.5% mortgage
    • some sellers are simply holding on until prices rise again
  • while days on market are longer and some houses are selling with contingencies, some well positioned properties are selling with multiple offers, though at times below list price even with multiple offers
  • it’s not a uniform market: some areas and  homes are selling far better or worse than others
  • as of the middle of late November, it seems like there is a standoff between unrealistic buyers (waiting for bigger price drops and / or interest rate declines) and unrealistic sellers (waiting for significant appreciation that doesn’t appear to be coming.

It’s a mixed market, but if interest rates don’t continue their steep climb, I would expect that home prices would be fairly flat for the remainder of the year while the market catches its breath. I think, hopefully, that the worst is over in terms of home prices slipping. Any given area could rise or fall a little, but I would not expect a huge change.

The market is strange to hear so much diversity between houses that fly off the market and those that languish. Listing agents and sellers may price  homes at the perceived market value, above it (“aspirational pricing”) or low (“motivational pricing”, which may be a mirage). Home buyers don’t know which one it is until they have seen a number of homes and recognize that some are simply too good to be true in terms of the list price. Often that is the case if it hits you that way!

In many cases, homes are selling at a more relaxed pace and buyers can have contingencies. To me, that’s a golden opportunity to buy. NAR’s chief economist is predicting a calm rest to 2022 nationwide, with things picking up in 2023. To me, that’s worth taking seriously. Buyers, don’t wait unless you prefer a market with multiple offers, crazy overbids, and contingencies being few and far between.


2022 New Year – Silicon Valley Real Estate Market Predictions are below (from January 4, 2022)

Last year I made some Silicon Valley real estate market predictions. My 2020 predictions had been correct despite the pandemic surprise. My 2021 were mostly on track, too, but appreciation was significantly steeper than I had expected. I’d thought that values would rise 5 – 10%, but it was more like 20% in 2021.

We wondered if there’d be a large influx of seniors selling after April 1st. when it was easier to move the property tax basis in California. If there was an uptick, it was dwarfed by the large scale inventory shortage and was nothing more than a drop in the bucket.

Quick 2022 prediction points (these look a lot like 2021, generally):

  • Inventory remains excessively low, demand high, prices will continue rising in 2022
    • many real estate economists are predicting a lower rate of appreciation for this year, but Silicon Valley often outpaces everywhere else
  • The situation is fueled by COVID, working from home, and low interest rates
  • Inflation is now playing a part, and interest rates are expected to rise a little in 2022
    • unless interest rates rise more than a percent, prices are likely to continue climbing as there is a ton of pent up demand still
  • Part of the challenge is that buyers who are moving up or downsizing are keeping their prior home as a rental (not selling it)
  • If the pandemic eases, will buyers be less driven? That’s a question. Some who are working remotely may eventually be called back to the office, but right now that seems unlikely. I believe we will have several years before the population is comfortable being in big crowds at work again. If and when that happens, there will be more demand for local housing, and it could spur prices to rise again.

We can never see all that far into the future, but as we begin 2022, I can tell you that I’ve never seen inventory this low. Today I checked and there are only 299 houses for sale in all of Santa Clara County. A year ago it was about twice that many.

Real estate corrections (10% or less) and crashes do happen periodically. Often it’s about every 10 years that we get a 10% price rollback or so. We have had 10 years of solid appreciation and are due for a correction. I don’t see it coming in the next 6 months, but any number of unforeseen things could trigger it.

Some buyers may ponder waiting. I’m not encouraging that because I don’t have any idea how much prices will rise before they roll back. Further, I don’t know what interest rates will be like whenever that does happen.

Last  year: Mary Pope-Handy’s Silicon Valley real estate market predictions for 2021:

Here’s what I had for the 2021 real estate market conditions in Santa Clara County. Not too far off the mark, but the pandemic didn’t ease much and senior sellers did not sell much.

      1. With ongoing crucially low inventory, there’s a good chance that prices will rise another 5-10% for single family homes in 2021. This will be even more likely if interest rates remain low and the stock market overly exuberant. A lot of wealth here in the Bay Area is tied to stock holdings.
      2. Condos and townhomes may be less desirable now and during the worst of COVID (and have lost some value in the last year), and may lose value in the short haul, but as prices for houses move out of reach, the condominium and townhouse market will likely become the next hot spot of the market. For the first half of the year, the majority of condos are likely to lose value, possibly making it a good time to buy a condo, but rise after the Spring market (when single family homes move further out of reach). That has often been the pattern.
      3. Early 2021: buyers aren’t going to wait for the Spring market, but will jump on inventory as soon as it becomes available. I was showing property on January 2nd.
      4. Multiple offers will remain common, particularly in areas with good commutes, good schools, or some feature with enduring value, such as architectural charm.
      5. Overbids and non-contingent offers may be the norm for much of the market. Non contingent may become more typical even without multiple offers.
      6. The second half of 2021 should bring relief from the Coronavirus, but also a loosening of tax regulations for senior home sellers with Proposition 19 going into effect as of April1st. It may be that some seniors will then be willing to sell and relocate to other parts of California. If there’s a significant increase in listings, we may see more balance come to the market. It would need to be a large influx of listings to change the present dynamics, but any increase in the number of homes to buy will help.
      7. Once this pandemic is in the rear view mirror, having a larger home, or being further from commute locations may not be as much of a driver as it is now. Will tech workers be able to continue living in resort areas while working for companies in Silicon Valley? We don’t know. The resort markets have been white-hot, too – but if 2 years from now people cannot actually live in Tahoe and work in Mountain View, there could be a trend reversal.

The driver of this white hot market is inventory. For those interested in more than just my predictions, please keep reading – here’s some more info on the housing inventory in Silicon Valley and its history.


Low inventory continues to be the # 1 story behind the real estate market in Silicon Valley and across the country. Our pandemic driven sellers’ market remains in full effect.


Related reading to Silicon Valley real estate market predictions:

Santa Clara County real estate market (this site, updated monthly)

San Jose real estate market analysis (this site)

Housing stats site – for Santa Clara County, San Mateo County, and Santa Cruz County


  • Mary Pope-Handy

    Silicon Valley Realtor, selling homes in Los Gatos, Saratoga, San Jose, Silicon Valley, and nearby since 1993. Prolific blogger with a network of sites.