Median Home Price in Silicon Valley Hits $2M
California metros top NAR list of most-expensive U.S. home markets.
The welcome news that inflation is finally heading below 3% isn’t reflected in California metros where year-over-year home prices surged by double-digits in the second quarter.
Silicon Valley set a new U.S. record in Q2 2024, becoming the first metro with a median home price topping $2M.
According to the latest data from the National Association of Realtors, prices for existing single-family homes in the San Jose-Sunnyvale-Santa Clara metro rose 11.4% in the second quarter compared to Q2 2023, raising the median price to $2.08M, Bloomberg reported.
NAR’s top-10 list of the most expensive U.S. home markets includes seven California metros.
The San Francisco-Oakland-Hayward metro was second on the list, with a median home price of $1.44M in the second quarter, representing an 8.5% increase in the YOY comparison. Anaheim-Santa Ana-Irvine was the third priciest market, with a median home price of $1.43M, a 15% hike from the Q2 2023 median.
San Diego-Carlsbad was fifth on the list, with a $1.05M median that reflected an 11.4% YOY increase; followed by Salinas at $1.03M, a 13.1% increase; Oxnard-Thousand Oaks-Ventura at $928K, a 2.5% increase; and San Luis Obispo-Paso Robles at $895K.
According to NAR data, 89% of U.S. metros saw home price increases in the second quarter, with the rate on a 30-year fixed mortgage ranging from 6.82% to 7.22% during Q2.
In 48% of U.S. markets, an income of at least $100K was required to afford a mortgage with a 10% down payment in the second quarter, compared to 40.7% in Q1.
“It’s terrific news for homeowners who are moving ahead in wealth gains. However, it’s difficult for those wanting to buy a home as the required income to qualify has roughly doubled from just a few years ago,” said Lawrence Yun, NAR’s chief economist, in a statement.
According to a report in the Mercury News, 33 cities in the nine-county Bay Area now have home prices topping $2M, including some communities in an hour-long commute from San Jose or San Francisco that saw a surge in home prices due to remote work patterns in the tech sector.
The report noted that some of the Bay Area towns with $2M homes have maintained their status as wealthy enclaves by making it difficult to build new houses.
After California passed a law allowing single-family lots to be split into four new units, Woodside garnered headlines when claimed to be exempt from approving any of the lot splits because the entire city is a habitat for endangered mountain lions. Located near Palo Alto, the typical home price in Woodside is $3.8M.