Los Altos real estate: Temporary jitters in a resilient market

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The real estate market is a responsive system that reacts to external factors much like the stock market. Recently, I've observed what I'd call a "jittery moment" in the Los Altos and surrounding markets — though I emphasize "moment" because temporary fluctuations don't necessarily indicate lasting trends. 

In recent weeks, I've witnessed more buyers backing out of transactions than usual, even after removing contingencies. Some are pausing their home buying plans altogether, and a few have even walked away from purchases, forfeiting significant earnest money deposits. This behavior points to some knee-jerk reactions among market participants spooked by stock volatility. 

The connection to stock market volatility is particularly relevant in Silicon Valley. With many tech professionals using company stock to fund home purchases, market downturns directly impact buying power. A 2025 real estate brokerage survey found that 20% of U.S. homebuyers plan to sell stocks for their next down payment — a percentage likely higher in our tech-centric region. From my experience, many buyers in luxury markets like Los Altos utilize stock proceeds or existing home equity for down payments averaging around 40% of the purchase price. 

I recently had a buyer cancel just days before closing, forfeiting a six-figure deposit to my clients, the sellers. Though personal reasons were cited, I suspect stock market declines influenced this decision. Even more telling, our backup buyer also withdrew, explicitly citing stock market concerns—despite the property being well-priced and desirable. 

However, these reactions follow a strong first quarter for Los Altos and Silicon Valley real estate. The uncertainty with the new administration has persisted for months, yet our local market performed well initially. What we're experiencing now appears to be a temporary reaction rather than a fundamental market shift. 

Having sold real estate in Silicon Valley for over twenty years through two significant downturns — the 2008-2009 crash and the 2000 dot-com bubble — the current situation feels distinctly different. Most analysts find limited correlation between stock and real estate markets; some sources even suggest stock declines can boost real estate as investors seek alternatives. Silicon Valley's unique dynamics create a more direct relationship since many buyers liquidate stock for their home purchases. 

Current inventory levels remain comparable to last year—if all of the 27 single-family homes on the market in Los Altos sell, then it would be similar to the 29 at this time last year. This similarity is noteworthy considering last year's narrative centered on buyers waiting for interest rate reductions. 

Despite the current caution, multiple offers continue for desirable properties, with homes still selling at market prices—often above asking. Los Altos will maintain its appeal as Silicon Valley innovation persists. Life transitions that drive real estate decisions—seeking great schools, wonderful neighborhoods or starting new chapters—haven't diminished in importance. 

While stock market volatility may cause short-term hesitation, Los Altos real estate values will remain strong. For buyers with stable finances, current conditions may present opportunities as competition potentially decreases. For sellers, proper pricing and presentation remain crucial. Properties that offer clear value still attract serious buyers, though the timeline might extend slightly compared to recent years. 

Looking ahead, I anticipate the market will regain confidence as stock volatility settles. Los Altos continues to benefit from limited inventory, exceptional schools, and proximity to major employers—enduring advantages that provide a buffer against temporary economic uncertainties. 

Real estate decisions should always prioritize personal needs and long-term financial goals over short-term market fluctuations. Whether you're considering buying or selling in today's environment, focusing on fundamentals rather than reacting to market jitters will lead to better outcomes. 

Alex Wang is a longtime Los Altos resident, Realtor, and founder of Rainmaker Real Estate.
For more information text/call (650) 800-8840 or visit AlexWang.com.