Published October 25, 2026 in Market Update

Some parts are still tight, but not all of South San Jose and South County

By Brad Bell

Real estate, South San Jose & South County - $700K+

Redfin reported San Jose home prices up 2.9% year over year in September. That number is real. But it covers a lot of ground. The Real Estate Data Aggregator counted 665 homes sold across South San Jose and South County in the three months ending August 31, 2026, and the story inside that number is not one story. It is several.

Months of supply ranged from 1.2 in one ZIP to 3.9 in another. That gap changes what a seller can ask for and what a buyer can push back on. Location inside this market matters more than the city-wide headline.

Where supply is tightest

The Real Estate Data Aggregator put months of supply at 1.2 in ZIP 95111 for the three months ending August 31, 2026. That is the tightest reading in this market. In that same period, 49.3% of homes there sold above list price, and the median days on market was 19. Sellers there were not giving much ground.

ZIP 95138 was close behind, at 1.4 months of supply. More than half of homes sold above list price there, 52.8%, and the average sale came in at 103.8% of list. Half of all homes went under contract within two weeks of listing, up 21.9 points from the same period a year before, according to the Real Estate Data Aggregator.

Where buyers have more room

ZIP 95135 is a different picture. The Real Estate Data Aggregator counted 3.9 months of supply there, up 1.4 months from a year before. Median days on market was 39, which was 16 days longer than the same period in 2025. The average sale came in at 98.1% of list, meaning homes were selling a little below asking. Only 22.2% sold above list price, down 17.5 points year over year.

The median sale price in 95135 was $837,000, down 23.3% from the same three months in 2025. That is a large move. It likely reflects a shift in what sold, not just price pressure, but buyers there did have more time and more leverage than anywhere else in this market.

ZIP 95046 in San Martin also showed 3.4 months of supply, and the average sale came in at 97.6% of list. Only 9 homes sold there in the period, so the numbers move easily with a few transactions. The Real Estate Data Aggregator had no year-over-year change figures for 95046, so those comparisons are not available.

The middle of the market

ZIP 95123 had the most sales of any ZIP here. The Real Estate Data Aggregator counted 150 homes sold in the three months ending August 31, 2026, up 7.1% from a year before. Months of supply held at 1.8, unchanged from 2025. The median sale price was $1,345,000, down 1.7%. Homes were selling in 19 days at 100.8% of list. Not as tight as 95111 or 95138, but still moving.

Morgan Hill, ZIP 95037, had 133 sales and 2.3 months of supply, down slightly from a year ago. The median was $1,360,000, off 1.1%. Homes took 25 days on average, 4 days longer than the same period in 2025. About 43.6% sold above list, up 10.3 points. Gilroy, ZIP 95020, was similar: 2.4 months of supply, median of $1,100,000, and 27 days on market.

What the wider market is doing

Redfin reported U.S. home prices up 3.8% year over year in September, the fastest annual pace since June 2025. Month over month, U.S. prices ticked up 0.25%, also per Redfin. The Federal Housing Finance Agency put the national year-over-year gain at 2.6% through July.

Rates are a factor. Realtor.com reported mortgage rates topped 7% in September 2026. That affects what buyers can carry, and it shows up in the slower pockets of this market more than the tight ones.

Realtor.com also reported that median list prices in the West fell 0.8% year over year in September, and that 22.8% of West region listings took a price reduction. That fits what the Real Estate Data Aggregator shows in 95135 and 95136, where supply rose and sale-to-list ratios slipped.

ZIP 95136: worth watching

ZIP 95136 sits between the tight and slow ends. The Real Estate Data Aggregator counted 2.4 months of supply, up 0.8 months from a year before. Homes for sale rose 41.9% year over year. The median sale price was $1,205,000, down 19.2%. Days on market came in at 29, up 4 days. The average sale was 100.5% of list, but that ratio slipped 2.3 points from 2025. It is not a slow market, but it is moving in that direction.

What this means if you own here

If your home is in 95111, 95138 or 95119, the data from the three months ending August 31, 2026 says supply is low and buyers are competing. Sellers in those pockets have been getting over asking, and homes are moving in under three weeks.

If your home is in 95135, 95136 or San Martin, the same period shows more inventory, slower days on market and sale prices at or below list. Pricing carefully from the start matters more in those spots.

Morgan Hill and Gilroy are holding steady, with supply around 2.3 to 2.4 months and sale-to-list ratios just above 100%. They are not tight, but they are not soft either.

One street can read differently from the ZIP code around it. If you want to know where your specific address lands, that is what I look at first.