Silicon Valley Homes Are Selling Over Asking Price – While the North Bay Market Remains Cautious

Written by:

Steve Marcinuk

Date:

08 Apr 2026

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In February, Silicon Valley’s real estate market delivered another round of eye-popping sales. At least 40 homes sold for $200,000 or more above the asking price, and 17 of those beat the list price by $400,000 or more. One Los Gatos property closed at $1.4 million over its original asking price.

Just an hour north, the story is different. In Petaluma and across Sonoma County, homes are selling at the asking price or sitting on the market if they’re overpriced. The bidding wars that defined 2021 and 2022 have faded, replaced by more typical negotiations and longer listing times.

“We’re not seeing anything like what’s happening in Silicon Valley,” says Steven Cozza, Realtor and team lead at Compass in Petaluma. “If you have a one-story bungalow in West Petaluma and you price it right, it might go for $100,000 over. But we’re mostly seeing homes sell at asking – or they sit.”

Why the Markets Have Diverged

Silicon Valley’s surge is driven by concentrated tech wealth and a severe shortage of homes for sale. High-earning buyers with stock options and large salaries are competing for a limited supply, especially in top school districts. This pushes prices far above asking and fuels aggressive bidding.

The North Bay, by contrast, serves a wider range of buyers – including first-timers, retirees, and small investors – and lacks the same concentration of ultra-high-income households. Higher interest rates have hit North Bay buyers harder, shrinking the pool of qualified purchasers and reducing competition for listings.

“Buyers here are more cautious,” Cozza explains. “They’re worried about layoffs, market instability, and whether they can afford the mortgage long-term.”

Insurance costs are also a major factor. In rural parts of Sonoma County, fire and flood insurance premiums have soared, sometimes adding over $1,000 per month to homeownership costs. These higher premiums have caused some deals to fall through, especially for investment properties with tighter margins.

What Sells – and What Sits – in the North Bay

Homes that sell quickly in the North Bay tend to share several features: they are priced at or slightly below market value, move-in ready, and located in neighborhoods close to schools and amenities. Buyers are looking for certainty and value, not bidding wars.

Cozza recently helped a client buy a home off-market that had been listed, then withdrawn during the holidays. “We negotiated it down about $100,000 from where they had it priced,” he says. The seller got a sure deal, and the buyer avoided competing with other offers.

On the other hand, homes purchased during the 2021–2023 peak are struggling to resell. Sellers who paid top dollar now find it difficult to break even after accounting for commissions and closing costs. Many of these homes are sitting on the market without offers, as buyers shy away from overpriced listings.

“Those homes are sitting,” Cozza says. “Buyers aren’t even making offers on overpriced listings anymore.”

The Impact of Off-Market Sales

A growing trend in both regions is the rise of off-market sales, where homes sell privately and never appear on the MLS. In the North Bay, this approach helps sellers avoid accumulating days on market – a red flag that can lead to price cuts.

Platforms like Compass Private Exclusive allow sellers to market their homes to a targeted pool of buyers quietly. A new partnership between Compass and Redfin now makes these private exclusives visible to a wider audience, but not to buyers who rely solely on Zillow or other public search sites.

“If you’re a buyer and you want to see off-market opportunities, you need to be on the right search engine,” Cozza says. “That’s going to be Redfin.”

How to Navigate the Current Market

For Buyers in the North Bay:

Take advantage of the slower pace. With less competition than Silicon Valley, you can tour multiple homes, negotiate for repairs or closing credits, and take time to make decisions. It’s especially important to get insurance quotes early, particularly for rural properties where premiums can be high. To access the full range of inventory, work with an agent who has connections to off-market listings and private, exclusive networks.

For Sellers:

Set realistic expectations. Prices from 2021 and 2022 are no longer the norm, so price competitively from the beginning. Minor upgrades and professional staging can help your home stand out in a market where buyers have more options. If your property needs work, consider programs that fund improvements upfront to boost your sale price without requiring cash out of pocket.

What This Means Going Forward

Silicon Valley and the North Bay may be close on the map, but their real estate markets are moving in opposite directions. In Silicon Valley, limited inventory and concentrated wealth are fueling record-breaking bidding wars. In the North Bay, buyers have become more deliberate, and homes must be priced and presented well to sell.

For buyers, this environment offers more time and negotiating power. For sellers, it’s a reminder that success depends on accurate pricing and strong preparation rather than market momentum alone.

“We’re not seeing the crazy ups or downs,” Cozza says. “It’s more of a flat line – just a steady market.”

About the Expert: Steven Cozza is a Realtor and Team Lead at Compass in Petaluma, California, serving Sonoma and Marin Counties. A former professional cyclist, Cozza has worked in real estate for 14 years and specializes in helping first-time buyers, luxury sellers, and small investors navigate the North Bay market.

This article is based on information provided by the expert source cited above. It is intended for general informational purposes only and does not constitute legal, financial, or real estate advice. Readers should conduct their own research and consult qualified professionals before making any real estate or financial decisions.