Collins: Where is the local housing market heading in 2026?

The 2026 housing market is shaping up to be anything but predictable.

With expectations that President Donald Trump’s administration will appoint a new Federal Reserve chair this year, questions remain about the potential impact on monetary policy. If the Federal Reserve lowers interest rates, will mortgage lenders follow suit? Recent history suggests the relationship between Fed actions and mortgage rates is not always direct. At the same time, global instability, persistent inflation and a softening job market have weighed on consumer confidence.

Against this backdrop of uncertainty, I reached out to industry experts working on the front lines to share their perspectives on where they see our local housing market heading.

Tamara Suminski, broker and current President of the California Association of Realtors, indicated California’s housing market is expected to gain modest momentum in 2026. Statewide home sales are projected to increase by approximately 2%, while the median home price is forecast to rise a manageable 3.6%. With interest rates anticipated to ease slightly next year, affordability is expected to improve marginally, offering buyers some relief.

At the local level, several members of the Santa Clara County Association of Realtors report that additional inventory may come to market early in 2026, as some sellers who previously delayed or withdrew listings plan to re-enter in anticipation of a stronger market. Overall, supply and demand are expected to move toward a more balanced dynamic.

Terese Ferrara, 2026 president-elect of the Santa Clara County Association of Realtors, noted that market conditions are already shifting.

“More offers with contingencies are being accepted,” she said. “While the multi-offer frenzy has cooled somewhat, well-positioned homes that are priced correctly and move-in ready are still attracting significant interest. The critical success factor is competitive pricing from day one and ensuring the listing stands out from the current competition.”

Ferrara encourages buyers to act sooner rather than later, while competition remains relatively moderate. She anticipates increased market activity as the spring approaches, particularly closer to May. Seasonal factors such as tax refunds, stock market gains and renewed buyer interest traditionally fuel demand in our local market. She also noted a renewed surge in buyer activity could occur if mortgage rates dip below 6%.

However, Ferrara cautions against attempting to time the market, emphasizing that “the best time to transact is when life circumstances and financial readiness align.”

Michael Gordon, 2026 president of the Santa Clara County Association of Realtors, echoed the importance of preparation. He predicts the market will experience cycles of brief opportunity followed by rapid shifts as supply and demand recalibrate.

“Those who are prepared ahead of time will be able to put together great deals,” Gordon said. “Those who hesitate too long trying to time the market may find themselves frustrated when conditions change faster than expected.”

While economic crosscurrents and policy shifts may continue to create uncertainty, insights from local industry leaders suggest a housing market that is gradually regaining momentum, with modest price appreciation and slightly improved affordability. Buyers and sellers who remain informed, price and position strategically and stay flexible as conditions evolve will be best positioned for success.

Ultimately, rather than attempting to time the market, success in 2026 will favor those who are prepared and maintain realistic expectations. As always, partnering with experienced Realtor professionals who understand how to navigate an evolving market can make a meaningful difference.

San José Spotlight columnist Neil Collins is CEO of the Santa Clara County Association of Realtors, a trade association representing more than 6,000 real estate professionals in Santa Clara County and surrounding areas. Contact Neil at [email protected].