Buying in the major Bay Area markets (such as San Jose, San Francisco, Fremont, Mountain View, etc.) works differently than in the rest of California (and the rest of the country). Homes are routinely listed for far less than their actual market value, bidding wars are common because of a structural shortage of housing, and non-contingent offers are the norm rather than the exception.
How to Decide the Offer Price: This is the trickiest aspect of buying a house in the Bay Area. Homes are routinely listed for far less than their actual market value, seller expectations are never revealed, and the sale price is often several hundred thousand dollars higher than the list price.
This is where having a top Realtor by your side can make a significant difference. We specialize in helping our clients win bidding wars by giving accurate price advice that reflects current market conditions.
Seller Price Expectation? Some of our clients ask, “Can we just ask the listing agent for the seller’s price expectations?” We tried this when we were new in the business, but the exercise was always fruitless. A listing agent put it beautifully: You are not competing against seller expectations—you are competing against other buyers. The seller is simply going to pick the highest offer with the best terms, no matter what their initial “expectation” was. Because most Bay Area properties receive multiple offers, you must predict where the other offers will land rather than guess the number the seller initially had in mind.
Avoiding a Bidding War: Keep an eye on properties that stay on the market for two weeks or longer. Making an offer on these properties with a very short expiration can help you avoid bidding wars. Many of our clients have had success with this strategy.
Market Pulse: The Bay Area housing market is closely tied to the tech stock market (think Nasdaq-100, QQQ, FNGU, or SOXX). This differs from much of the country, where interest rates play a bigger role. So far, 2025 is shaping up to be a much more buyer-friendly year compared with 2024, which was a straight seller’s market.