January Existing-Home Sales Drop 8.4% — What It Means for Silicon Valley
The latest report from the National Association of Realtors (NAR) shows that existing-home sales declined 8.4% in January compared to December, and were down 4.4% year over year.
NAR Chief Economist Lawrence Yun attributed much of the slowdown to unusually harsh winter weather across large parts of the country, making it difficult to determine whether the drop reflects deeper economic weakness or temporary seasonal factors.
The Key Numbers
Existing-home sales: -8.4% month over month
Single-family sales: -9% month over month
Inventory: 3.7 months of supply (still historically low)
Median home price: $396,800 (+0.9% year over year)
Affordability index: Improved to 116.5
While sales slowed, prices continued to edge higher due to limited supply. At the same time, affordability improved compared to last year, driven by wage growth and slightly lower mortgage rates.
In short: demand cooled temporarily — but inventory remains constrained.
My Take: National Headlines Don’t Tell the Silicon Valley Story
Here’s where context matters.
National sales can drop 8%, but that does not automatically translate into softer pricing in Silicon Valley — especially for single-family homes in neighborhoods with strong schools and proximity to major tech employers.
Our market behaves differently because:
Household incomes are significantly higher than national averages
Inventory is structurally constrained
Tech employment continues to anchor buyer demand
Many sellers have low fixed-rate mortgages and don’t need to sell
When national reports show declining sales, what I look for locally is this:
Are well-priced homes still drawing multiple offers?
Are buyers competing in top school districts?
Is inventory expanding meaningfully?
Right now, the answer in many Silicon Valley submarkets is that demand for desirable single-family homes remains very strong — even if transaction volume nationally is down.
National data provides helpful perspective. But pricing strategy, negotiation leverage, and timing decisions should always be based on hyper-local conditions.
If you’re buying or selling in Silicon Valley, interpreting national headlines without understanding our local dynamics can lead to costly mistakes. That’s where experience and on-the-ground insight matter most.
— Brad Le
