Top Silicon Valley real estate agent Ken DeLeon shares his insight into the next decade of buying and selling in the Bay Area.
As one of Silicon Valley’s top real estate agents, Ken DeLeon has built a reputation for his ability to predict market trends with precision. With nearly $1 billion in home sales in 2024 alone, DeLeon is a trusted source for insight into the Bay Area real estate landscape. Below, he shares his forecast for the region's housing market in the coming years, key trends and shifts that buyers and sellers should expect.
Prediction 1: Strong Appreciation
After a period of relative stagnation, DeLeon predicts the Bay Area market is on the verge of a resurgence. “Homes are poised for strong appreciation in the coming years,” he says. “The headwinds that hampered appreciation before—such as spiking mortgage rates and uncertainty caused by the election and geopolitical volatility—will dissipate, and homes should enjoy moderate appreciation in coming years.”
DeLeon is particularly optimistic about appreciation in areas near Silicon Valley’s tech headquarters. “The homes closer to the headquarters of Apple, Nvidia, Google and Meta will see greater appreciation than the homes further north,” he says. “This is due to two factors: buyers are paying a premium for homes located closer to their workplace, and the allure of being close to San Francisco has rapidly declined. Now, buyers are drawn to Atherton over Hillsborough and Menlo Park over Burlingame.”
Prediction 2: Single-Family Homes Will Prevail
Looking ahead, DeLeon predicts that the trend of single-family homes out-appreciating condos and townhomes will continue to flourish due to fewer restrictions. “California is now allowing more optionality on land development, such as subdividing or building an Accessory Dwelling Unit, so this will further drive up the prices of larger lots, whereas condos and townhomes will not enjoy this upward trend as much,” he says.
This trend is especially noticeable in Silicon Valley, where the supply of single-family homes has dwindled significantly over the past two decades. “The number of single-family homes for sale in Santa Clara and San Mateo counties has declined by more than 60% in the last 20 years, due to tax disincentives when selling, including paying capital gains taxes and losing one’s Prop 13 basis” DeLeon explains. “The continual lack of supply, often as low as 1/8th of the inventory per capita of other markets, will be a driver of price appreciation and also a bulwark against depreciation in a slower market.”
Prediction 3: Luxury Market Growth
DeLeon also notes that the luxury real estate sector is on track for a strong recovery. “Luxury real estate in the Bay Area, which cooled during the past two years, is now poised for strong appreciation,” he says. “There is less uncertainty overall with the election over, and now that capital gains taxes will not increase, there will be upward pressure on price. The towns of Atherton and Woodside seem particularly poised to experience price increases as there has been a dearth of supply there over the last few years, which can be attributed to discretionary sellers holding off on listing due to mediocre market conditions.”
In terms of what luxury buyers are looking for, DeLeon notes several changes in preferences. “Amenities that seem particularly in demand include spa zones, replete with a steam room and wet and dry sauna,” he notes. “Guest houses and other multiple detached structures have gone from being a nice bonus to becoming requisite. Great rooms and primary closets are expanding while living rooms are shrinking. Architecturally, the most common and in-vogue styles are contemporary and transitional, with Mediterranean homes being less universally desirable.”
As for agents like DeLeon, he foresees artificial intelligence playing a growing role in the home-buying process. “Brokers will utilize AI to assist in their home searching,” he says. “I envision asking buyers several key questions, such as what they find most valuable amongst key criteria. Then, an AI algorithm could incorporate their initial responses, iterate and improve as buyers give feedback on predictive properties they would likely want to view. This will give buyers better analysis and free up agents to help their clients in other ways such as adding value after getting into escrow.”
With high demand for homes near Silicon Valley’s tech hubs, fewer restrictions on development and an increasing preference for larger homes and specialized amenities, DeLeon’s predictions for the Bay Area real estate market paint an optimistic picture for the coming years.
Ken DeLeon | DRE #01342140 | www.DeLeonRealty.com
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