This five-bedroom, seven-bath house in Atherton was listed for $32.5 million at the start of spring. Photo by Matt Anello, courtesy Charlene Cogan, Christie’s International Real Estate Sereno.
The Midpeninsula’s spring housing market is shaping up as a tale of two buyers: confident, high-end purchasers driving competition and prices in the luxury market, and more cautious shoppers weighing layoffs, interest rates and global instability before making a move.
Local real estate experts say the Midpeninsula market has opened 2026 with surprising strength, but a growing segment of buyers is taking a more measured approach, weighing whether to act now or wait as spring unfolds.
“The year started out very busy,” said Susan Sims, a broker with The Agency Los Altos, noting that activity was robust even during the typically slower winter period before the Super Bowl in early February.
The market was “especially strong at the higher end,” with even the ultra-high-end seeing significant activity, she added.
The ultra-high end segment — defined as homes priced at $15 million and above — has, somewhat suprisingly, exceeded expectations so far in 2026, particularly in Atherton, where five of the town’s nine recorded sales in the first quarter were listed above $15 million, according to MLS data.
There is a lot of money in this area. We are in a very strong market.
Denise Welsh, broker associate and sales manager at Compass.
Across the region, home values remain among the highest in the state. As of early 2026, the median home value in Palo Alto hovered around $3.5 million, with some of the city’s more exclusive neighborhoods exceeding $5 million, according to Zillow data. In Los Altos, the median home value is over $4.3 million, while neighboring Los Altos Hills properties often exceed $5.7 million.
Atherton remains one of the most expensive markets in the country, with a median home price exceeding $7.4 million in February. Recent high-end sales on the Midpeninsula include homes closing for $25.5 million in Woodside, $22.2 million in Atherton, $18.2 million in Los Altos Hills and $16.3 million in Portola Valley, according to MLS data from February through early March.
“The luxury market has been stronger than anticipated this year,” said Alexander Lewicki, director of listings for Palo Alto-based DeLeon Realty.
According to Compass, there were 40 sales of homes priced at $5 million or above during February in the communities of Palo Alto, Los Altos, Los Altos Hills, Menlo Park, Atherton, Woodside and Portola Valley. That compares with 30 home sales in that price range in February 2025.
Still, uncertainty is beginning to influence behavior as the market heads deeper into spring.
“Not sure if it might be the (Iran) war or layoffs in the tech industry, or perhaps other economic issues,” Sims said. “Some buyers in the market are deciding to hold off and wait and see.”
Many of those who are moving forward tend to view Midpeninsula real estate as a relatively stable investment amid stock market volatility, experts said.
This 1920s Mediterranean home with four bedrooms and three baths on a 7,492-square-foot-lot in Palo Alto’s Southgate neighborhood recently sold for $5 million. Courtesy Elyse Barca/Compass
“They view real estate as a secure investment,” Sims said. “The market is still considered a strong seller’s market, and many properties are experiencing multiple offers in all price ranges.”
Seeking financial security may be a key motivator for buyers in Los Altos, Palo Alto, and Atherton, where demand remains especially strong. Denise Welsh, broker associate and sales manager with Compass, said the Atherton market in particular “has been on fire.”
Looking ahead, economists say the region could see continued momentum. Lawrence Yun, chief economist for the National Association of Realtors, said the Bay Area housing market is poised for a rebound in 2026 as interest rates begin to decline. He expects inventory to rise and home prices to increase between 2% and 6% during the upcoming year.
“The Bay Area is … like the renaissance center … It’s the tech edge, the technology frontier,” he said while presenting his “Housing Market Trends and Forecast 2026” to Realtors in Mountain View earlier this year.
At the same time, the region’s innovation-driven economy continues to intensify housing challenges. First-time buyers — particularly those without family assistance for a down payment — face significant barriers to homeownership, Yun said.
Outside the luxury tier
Demand this spring isn’t limited to the luxury market. Even among cautious buyers, sales activity for well-priced, newer or recently updated homes with three or four bedrooms and at least two bathrooms remained brisk as the season moved into early spring.
“These homes priced in the $2 million to $3 million category are flying off the shelves,” Welsh said at the start of spring.
Elyse Barca, a Menlo Park-based broker with Compass, said the region’s artificial intelligence boom is helping fuel demand.
“Employees in the AI space are driving an extraordinary amount of real estate investment in our area,” she said.
At the same time, the tech industry is contributing to a growing sense of uncertainty that agents say is beginning to surface this spring.
In recent months, major tech companies including Amazon, Meta, Salesforce and Google have announced thousands of layoffs, many tied to cost-cutting and increased investment in artificial intelligence. State Worker Adjustment and Retraining Notification (WARN) filings show hundreds of Bay Area job cuts in early 2026 alone, including in Menlo Park, Mountain View and East Palo Alto. The cuts, particularly among engineers, have contributed to a growing sense of caution among some prospective buyers.
“There is some concern about what’s coming out of Washington, D.C.,” Barca said. “And recent layoffs in the tech industry could have some impact, too.”
The result is a split market: Buyers benefiting from the AI boom continue to compete aggressively, while others are holding back amid job cuts, market volatility and policy uncertainty.
“The Midpeninsula is a well-heeled, affluent area, but we are not completely immune to broader political and economic pressures,” Barca said.
Demand for ultra-luxury properties priced above $15 million — like this Portola Valley home that sold for $56 million at the end of 2025 — has been stronger than anticipated so far this year, according to local real estate experts. Photo by Matt Anello, courtesy Chris Iverson.
Low inventory, high competition
The region’s persistently tight housing inventory remains another challenge for buyers. While multiple offers may not be quite as ubiquitous as in past years, receiving eight or nine offers on a well-priced, well-maintained property is still not uncommon, agents said.
The Midpeninsula is a well-heeled, affluent area, but we are not completely immune to broader political and economic pressures.
Elyse Barca, broker at Compass, Menlo Park
Tight inventory, combined with pent-up demand, has pushed prices up 5% to 6% compared with last fall, according to Lewicki. He noted that inventory levels are slightly higher in Santa Clara County than in San Mateo County.
In some cases, competition is driving prices well above asking.
Barca cited one home that sold for $600,000 over its list price. Welsh pointed to a half-acre property near downtown Los Altos that was listed at $5.5 million and ultimately sold for $7.2 million.
As of late March, Welsh said 34 properties were on the market in Los Altos, with 17 already under contract.
Who’s buying — and how
Lewicki noted that the pool of motivated buyers extends beyond tech workers.
“We also have lawyers, doctors and dentists,” he said. “We have young families looking for homes close to schools, parks and recreation.”
Another emerging trend this spring is a growing preference for shorter-term adjustable-rate mortgages, typically six to 10 years, which offer lower initial interest rates compared with traditional 30-year fixed loans.
Buyers with strong banking relationships are also securing mortgage rates slightly below the current level of more than 6%, Lewicki said.
The market is still considered a strong seller’s market, and many properties are experiencing multiple offers in all price ranges.”
Susan Sims, broker at The Agency, Los Altos
Across the Midpeninsula, including Palo Alto, Menlo Park and Los Altos, updated homes in desirable locations continue to draw large crowds at open houses and generate multiple offers.
“A home in Los Altos Hills priced around $6 million drew eight offers,” Lewicki said. The median sale price there in February was $5.4 million.
Another sign of sustained activity: Home stagers and contractors are in high demand as sellers prepare properties for market.
“There is a lot of money in this area,” Welsh said. “We are in a very strong market.”
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