The latest numbers on U.S. builder sentiment reflect some real shifts in the market. In late Q3, the builder-confidence index dropped by 3 points to 32, with current sales conditions at 35 and six-month sales expectations down to 37. Buyer traffic remained at 23—a reminder of how sensitive the market is to broader economic pressures. Notably, 38% of builders nationwide have reduced prices, and two-thirds are now offering incentives, up from 63% in mid-Q3. On the financing front, mortgage applications for new-home purchases have declined for the fifth consecutive month as average 30-year rates stayed in the high-6% range. Many larger builders are responding by offering builder-paid rate buydowns, which help buyers secure below-market mortgages and keep things moving without relying solely on price cuts. With 30-year rates near 7% as of late Q3, two leading housing forecasters expect rates to remain in this high-6% or higher territory through 2027.

As someone who’s helped buyers and sellers navigate changing markets for over 46 years on the mid-Peninsula, I know that understanding these trends—and how they affect your real estate journey—is key. My approach has always been to put my clients first, ensuring you have the insights and support you need to make confident decisions, no matter the market climate.

Over my 46+ years working with buyers and sellers across Palo Alto, Mountain View, Menlo Park, and the surrounding mid-peninsula, I’ve seen the California housing market move through many cycles. Right now, we’re entering a period of steadier growth: home prices are projected to rise by a modest ~3% to ~4% per year through 2028. For those navigating these decisions, this shift means a more predictable environment compared to the volatile surges of previous years.

With active listings around ~156,300, buyers are seeing more options and less urgency—a welcome change, although affordability remains a real challenge. Only about 18% of California households qualify for a typical mortgage, down from 31%, keeping competition especially fierce for entry-level homes. Properties are still selling near 100% of asking price, and 30-year fixed rates are hovering around 6%. This dynamic is shaping a market where careful preparation and strategic moves matter more than ever.

In major urban centers like Los Angeles County, it may take until after 2028 for sales to return to previous levels. But for the broader state, the current landscape is one of stability and predictability—qualities that can help buyers and sellers plan thoughtfully. As always, my focus remains on listening closely to your needs and guiding you through every step with care, whether you’re stepping into the market for the first time or are a seasoned homeowner.

As someone who's spent over four decades guiding clients through the ever-changing real estate landscape of Palo Alto, Mountain View, Menlo Park, and our neighboring mid-peninsula communities, I’ve seen firsthand how national trends can echo in our local markets. By Mid-Q3 2026, active inventory across the U.S. reached 1.14 million—up about 4% from last year’s 1.1 million. While that's growth, it’s a much slower pace than the previous year’s remarkable 21% jump, and only a slight improvement from the low point of 2% growth we saw in late Q2.

It’s interesting to note that, by this point, 18 states and DC had inventory levels above pre-pandemic 2019 numbers, even though the national supply overall remains about 8% below where we were in mid-2019 (with 1.14 million active listings compared to 1.24 million back then). This tells us that, despite the dramatic shifts and a softer market, the U.S. still hasn’t fully rebuilt its housing stock. Prices have flattened on a yearly basis, and with higher yields and mortgage rates on the horizon, momentum could be tested further.

In times like these, thoughtful guidance and a client-first approach become even more important. Whether you’re a seasoned homeowner or taking your very first steps into the market, I’m always here to listen, offer insight, and help you navigate these nuanced conditions with care and clarity.

Indigenous Peoples’ Day celebrates, recognizes, and honors the beautiful traditions and cultures of the Indigenous People
We take a stand for and support the indigenous people on this day.
We should also offer our support to those who invest and uplift the indigenous communities.

As someone who has guided families through home buying and selling for over 46 years across the Palo Alto and San Francisco mid-peninsula communities, I know just how much weight school quality carries in the decision-making process. Recent data highlights that from early Q1 to late Q2 2026, homes in highly rated U.S. school zones commanded a typical price of $580K—a 35% premium over the $430K average. To afford these homes, a household needed about $159K in income, which is roughly $41K more than the typical U.S. home required over the same period. For many median-earning families, buying in a top school district would take about 55% of income, compared to about 40% for a typical home. And only 13% of listings in these sought-after zones were affordable to median-income households, versus 28% overall. These numbers underscore the premium value sellers can realize, but for buyers, it’s a balancing act—school ratings, commute, total costs, and child-focused resources all come into play. In my experience, navigating these choices is about more than numbers; it’s about helping you weigh what matters most to your family while keeping your interests at the heart of every decision.

Over the years, I've seen our real estate landscape shift through many cycles, but the current environment presents a unique challenge for buyers. By late Q3, the typical monthly payment for US buyers climbed to $2,600—a 14-month high—driven by rising mortgage rates and stable home prices. The national median sale price increased about 2% year-over-year to roughly $399,000, which continues to put pressure on affordability. As a result, pending sales have held steady month-over-month and remain lower than last year.

I’ve noticed that while mortgage-purchase applications have dipped slightly, new listings—though impacted by holiday timing—are still modestly above the same period last year. Sellers are having to recalibrate: about 21% of active listings have reduced their prices, and it’s clear that strategic pricing is drawing more interest, while overpricing quickly leads to hesitation from buyers.

Active inventory has ticked up about 2% from last year, with 1.5 million homes on the market and supply nearing four months, though we’re still short of a balanced market. Having helped clients navigate both competitive and shifting markets throughout Palo Alto, Mountain View, Menlo Park, and the surrounding Peninsula, I know firsthand how crucial it is to stay informed and adaptable. Thoughtful strategy and clear communication can make all the difference in times like these.

Pending home sales in the US inched up by just 0.3% in mid-Q3, offering a glimpse into the current contract activity. Despite higher mortgage rates, buyers are still stepping forward, encouraged by job gains and improved incomes, though these factors only partly counterbalance the increased pace of home price growth. Year-over-year, contract activity remains about 5% lower, and overall, we’re still seeing national pending sales levels roughly 30% below the more robust pre-pandemic years—a clear sign of how much the market has shifted since 2021, when rates hovered near 3%. As someone who’s spent over four decades helping buyers and sellers navigate each market turn in Palo Alto, Mountain View, Menlo Park, and the surrounding mid-peninsula, I’ve learned that understanding early signals like pending sales is key to making informed real estate decisions. Pending contracts typically close within a month or two, so they remain a valuable early indicator—even though financing or inspections can occasionally push timelines. My approach has always been about keeping clients informed and supported every step of the way, regardless of where the market stands.