Full Breakdown
Midpeninsula Real Estate Market Shows Signs of Cooling
1/31/2026, 1:27:15 PM
Overview of Market Trends
Recent data from the California Association of Realtors indicates a notable shift in the Midpeninsula real estate market, particularly in December 2025. While many areas are experiencing a decline in overbidding, Mountain View and Los Altos are exceptions, with a significant number of buyers still paying above the asking price. The overall market appears to be adjusting after years of intense demand, with fewer buyers willing to pay over list prices in several cities.
Key Market Insights
In December 2025, the Midpeninsula saw a decrease in the percentage of buyers paying over the asking price for single-family homes. In Palo Alto, only 40% of buyers paid above list price, a drop from 48% the previous year. Additionally, 26% of sellers reduced their asking prices, up from 24% in December 2024. The median list price per square foot in Palo Alto was $1,716, with some homes listed as high as $3,362.
Conversely, Mountain View reported a robust market, with homes selling in an average of just two days. Approximately 85% of buyers paid over the asking price, an increase from 65% the previous year. The median price per square foot in Mountain View was $1,665, reflecting a competitive environment with 38 recorded sales.
Los Altos also showed strong performance, with 73% of buyers paying above asking prices, up from 63% in the previous year. The median price per square foot reached $1,775, while only 20% of sellers reduced their prices, down from 23% in 2024.
Performance in Other Cities
Redwood City experienced a cooling trend, with only 42% of buyers paying over list price, down from 57% last year. Homes averaged 36 days on the market, and 19% of sellers lowered their prices compared to 23% the previous year. The median price per square foot was approximately $1,000.
Menlo Park's market also showed signs of slowing, with homes selling in an average of 11 days. About 43% of buyers paid over list price, a decrease from 49% the previous year. The median price per square foot was $1,925, with 17 recorded sales.
East Palo Alto's market slowed considerably, with homes remaining on the market for an average of 58 days. Approximately 40% of buyers paid over asking, down from 58% the previous year, while the median price per square foot was $905.
Criticism & Opposition
Some analysts express concern that the cooling market may indicate broader economic challenges affecting buyer confidence. The decline in overbidding could reflect a shift in buyer sentiment, as potential homeowners reassess their purchasing power amid rising interest rates and economic uncertainty.
Official Statements & Responses
The California Association of Realtors noted that the December data provides a snapshot of market conditions during a traditionally slower month, emphasizing the need for buyers and sellers to adapt to changing dynamics.
Verbatim Quotes
“December sales data released this week by the California Association of Realtors shows that Mountain View and Los Altos stand out, with more buyers paying above list price and fewer sellers dropping their asking prices.” — California Association of Realtors
“Redwood City saw cooling buyer competition.” — California Association of Realtors
“East Palo Alto Homes on the market longer Fewer buyers paying over list price East Palo Alto’s market slowed considerably.” — California Association of Realtors
What's Next
As the Midpeninsula real estate market continues to evolve, stakeholders will be closely monitoring trends in buyer behavior and pricing strategies, particularly as economic conditions fluctuate.
