Downtown San Jose Condo Market Update, What 2025 Reveals About 2026

The Downtown San Jose condo market in 2025 has shifted into a more balanced and thoughtful phase. Unlike single-family homes, condos respond differently to interest rates, buyer lifestyle preferences, and monthly cost considerations. Understanding these condo-specific trends helps buyers and sellers make smarter decisions as we move into 2026.

Downtown San Jose Condos in 2025, A Market Reset

Throughout 2025, Downtown San Jose condos experienced a noticeable slowdown in momentum. This was not a collapse, but a reset. Buyers gained more leverage, listings stayed on the market longer, and pricing became more sensitive to condition, building quality, and HOA structure.

Well-located condos that were properly priced and move-in ready continued to sell, while units that lacked updates or were positioned aggressively struggled to attract attention.

Why the Downtown Condo Market Behaved Differently

Interest Rates Impact Condo Buyers Faster

Condo buyers tend to be more payment-conscious than single-family home buyers. Higher interest rates in 2025 directly affected affordability, especially for first-time buyers and downsizers focused on predictable monthly expenses.

HOA Fees Matter More Than Ever

Rising insurance, maintenance, and operating costs made HOA dues a central decision point. Buyers evaluated not just the purchase price, but the full monthly obligation, including HOA fees, taxes, and financing.

Downtown buildings with strong reserves, transparent management, and meaningful amenities consistently outperformed those with rising dues and limited value.

Competition From the Rental Market

Downtown San Jose continues to have a strong rental market. In 2025, some buyers delayed purchasing when rental costs felt comparable to ownership, particularly for those unsure about long-term plans.

What Buyers Clearly Preferred in 2025

The 2025 market reinforced that not all Downtown San Jose condos are equal. Buyer demand concentrated around specific features:

• Natural light, views, and outdoor space
• Secure parking and well-maintained common areas
• Flexible floor plans that support working from home
• Buildings with strong HOA financials and reputations

Condos without clear differentiation required sharper pricing to remain competitive.

What This Means for Downtown San Jose Condos in 2026

Stability Over Rapid Appreciation

The correction in 2025 reset expectations. Heading into 2026, Downtown San Jose condos are positioned for stability rather than dramatic swings. Prices are expected to move based on individual unit quality and building strength, not broad market momentum.

Pent-Up Demand Could Re-Enter the Market

If mortgage rates ease, even modestly, buyers who paused in 2025 may re-enter. This demand will likely target well-priced, turnkey condos first, not the entire condo inventory.

Condos Remain a Lifestyle Choice

Downtown San Jose condos continue to attract buyers seeking walkability, proximity to transit, and a lock-and-walk lifestyle. This underlying demand supports long-term market stability going into 2026.

Advice for Downtown San Jose Condo Buyers in 2026

• Analyze total monthly ownership costs, not just price
• Review HOA budgets, reserves, and upcoming projects
• Focus on units that stand out within their building

Advice for Downtown San Jose Condo Sellers

• Price based on current condo-specific demand, not past peaks
• Presentation and condition have a direct impact on value
• Turnkey condos consistently outperform those needing work

Final Thoughts on the Downtown San Jose Condo Market

The Downtown San Jose condo market in 2025 marked a return to fundamentals. Buyers became analytical, sellers needed to be strategic, and building quality mattered more than ever.

As 2026 approaches, opportunity exists for those who understand how condos truly behave in this market. With realistic expectations and the right approach, Downtown San Jose condos remain a compelling option for buyers and sellers alike.