Published October 11, 2026 in Market Update

One part of this market stayed very tight while another slowed down

By Brad Bell

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

Where you live inside this market matters more than the market average right now. The Real Estate Data Aggregator counted 665 homes sold across South San Jose and South County in the three months ending August 31, 2026. But that number hides a real divide. Some ZIP codes are still tight. Others have softened.

Rates are part of the backdrop. CNBC reported the average 30-year fixed rate at 7.49% as of October 7, 2026. Realtor.com reported that mortgage rates topped 7% in September 2026 and that 22.8% of West region listings took a price cut that month. That pressure shows up unevenly here.

The tight side: 95111 and 95138

ZIP 95111 had 1.2 months of supply and a median of 19 days on market, per the Real Estate Data Aggregator. Nearly half of homes, 49.3%, sold above list price. The sale-to-list ratio came in at 102.6%. Prices dipped 1.7% year over year to $995,000, but the pace of sales was up 15.5%.

ZIP 95138 was even tighter on pace. The Real Estate Data Aggregator showed a median of 18 days on market and a sale-to-list ratio of 103.8%, up 4 points from a year before. Half of all homes went under contract within two weeks of listing. The median sale price was $1,470,000, though that figure was down 16.7% year over year. With only 36 sales in the period, a shift in the mix of homes sold can move that median a lot.

The slower side: 95135 and 95136

ZIP 95135 looked different. The Real Estate Data Aggregator counted 3.9 months of supply and a median of 39 days on market, up 16 days from a year before. Only 22.2% of homes sold above list. The sale-to-list ratio was 98.1%, meaning sellers on average accepted a little less than they asked. The median sale price fell 23.3% year over year to $837,000, and homes sold dropped 33.8%.

ZIP 95136 also softened. The Real Estate Data Aggregator showed 2.4 months of supply, 29 days on market, and a sale-to-list ratio of 100.5%, down 2.3 points from a year ago. Only 27.7% of homes went under contract within two weeks, down 10.6 points. The median sale price was $1,205,000, down 19.2%, with inventory up 41.9% year over year.

The middle: 95119, 95123, 95037, 95020 and 95139

ZIP 95119 was the fastest of this group. The Real Estate Data Aggregator showed 9 days on market and 58.3% of homes selling above list. Supply held at 1.9 months. The median was $1,383,900, nearly flat year over year.

ZIP 95123 had 150 homes sold, the second highest count in the market. The Real Estate Data Aggregator showed 1.8 months of supply and 19 days on market. Nearly half of homes, 48.7%, sold above list. The median was $1,345,000, down 1.7%.

ZIP 95037 (Morgan Hill) had 133 homes sold and 2.3 months of supply. The Real Estate Data Aggregator showed 25 days on market, up 4 days from a year ago. The median was $1,360,000, down 1.1%. About 43.6% sold above list.

ZIP 95020 (Gilroy) had 113 homes sold and 2.4 months of supply. The Real Estate Data Aggregator showed 27 days on market, unchanged from a year ago. The median was $1,100,000, down 5.6%. About 38.1% sold above list.

ZIP 95139 is a small pocket. The Real Estate Data Aggregator counted only 10 homes sold. The median was $1,350,000, up 41.4% year over year. With that few sales, one or two expensive homes can move the median a lot. Supply rose to 1.8 months from 0.5 months a year ago.

San Martin (95046): a small market worth watching separately

ZIP 95046 had only 9 homes sold in the period, per the Real Estate Data Aggregator. The median was $1,500,000 and supply sat at 3.4 months. The sale-to-list ratio was 97.6%, and only 22.2% sold above list. But 62.5% went under contract within two weeks. With this few sales, the numbers shift quickly. The Real Estate Data Aggregator has no year-over-year comparison figures for this ZIP.

What this means for sellers

In 95111 and 95138, sellers are still getting offers above list and closing fast. Pricing aggressively is still an option there.

In 95135 and 95136, the pace has slowed and inventory has grown. Sellers there need to price to where the market is, not where it was a year ago. Realtor.com reported that 22.8% of West region listings took a price cut in September 2026. That pattern is visible in these two ZIP codes.

The middle ZIPs are still moving, but with less urgency than a year ago. Buyers have a little more time and a few more choices.