Silicon Valley Real Estate: Is the Boom Officially Over?
Silicon Valley Real Estate Growth Hits Decade Low
Santa Clara County's real estate market is showing signs of a slowdown, with assessed values growing at their slowest pace since 2012. According to a new report from the county assessor’s office, the 2025-2026 assessment roll increased by just 4.15%, reaching $725.7 billion. While this is a record high, the growth of $28.9 billion from the previous year pales in comparison to previous years.
Commercial Real Estate Struggles
The primary driver behind this sluggish growth is the struggling commercial real estate sector. The rise of remote work, coupled with office vacancies and loan delinquencies, has created significant challenges for Silicon Valley and the entire nation.
- Office vacancy rates in Silicon Valley remain stubbornly high, hovering around 20% for the past two years.
- Tech industry layoffs have further exacerbated the problem, leading to increased vacancies and declining rental rates. Over 70,000 tech employees were laid off in the first half of 2025 alone.
Cities Hit Hardest
Several cities within Santa Clara County are experiencing the brunt of this slowdown. Mountain View, Sunnyvale, Milpitas, Cupertino, and San Jose have the lowest rates of growth. Mountain View, which previously enjoyed the highest percentage of roll growth, has seen a steep decline due to its heavy reliance on commercial properties.
Residential Properties Offer Stability
However, not all cities are struggling. Morgan Hill, for example, has benefitted from its stable residential property values, resulting in the highest rate of growth in the county. Santa Clara has also seen growth driven by increased investment in data centers.
Looking Ahead
The future of Silicon Valley's real estate market remains uncertain. The ongoing challenges in the commercial sector, coupled with potential economic headwinds, could continue to dampen growth. The situation is concerning as local public revenue is pegged to the property assessments. If this becomes a long-term trend, it may cause reduction of public services.