California 2026 Housing Market Forecast: Real Estate Trends, Prices & Outlook

Written By Buena Vista Vision

As 2025 comes to a close, homeowners and buyers across San Mateo County and Santa Clara County are asking the same question — what’s next for Bay Area real estate?

The latest California housing market forecast reveals encouraging signs: 2026 is shaping up to be a year of balance and renewed opportunity. After several years of volatility, the Bay Area housing market is expected to stabilize, creating a more level playing field for both buyers and sellers.

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 increasing

These steady conditions provide the foundation for a healthier California real estate market, where stability supports confident decision-making.

California Housing Forecast 2026

Industry experts anticipate moderate but meaningful growth statewide:

  • Home Sales: +2% to approximately 274,000

  • Median Home Price: +3.6% to about $905,000

  • Mortgage Rates: Easing to around 6.0%

  • Affordability: Near 18%, reflecting ongoing demand and limited inventory

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 Local Market

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 2026 forecast paints a picture of measured growth and renewed confidence. Modest price appreciation, easing mortgage rates, and a balanced pace of transactions make this an excellent time to plan your next move.

If you’re considering buying or selling in Menlo Park, Palo Alto, Mountain View, Redwood City, Burlingame, or Los Altos, now is the perfect time to prepare. With the right strategy and market insight, your 2026 real estate goals can become reality.

📞 Call Lisa today at 650.668.1868 or email lisa.lum@cbrealty.com to discuss your plans and position yourself for success in the 2026 housing market.

Buena Vista Vision
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