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The median home price in Silicon Valley topped $2 million in the second quarter, the first time a US metropolitan area has exceeded that threshold and a symptom of the nation's persistent affordability challenge.
Prices for existing single-family houses in the San Jose-Sunnyvale-Santa Clara area rose 11.6% in the second quarter from a year earlier to $2.08 million. No metropolitan area in the country had exceeded $2 million in National Association of Realtors® data back to 1979, the group said Tuesday. Neighboring San Francisco ranked second among most expensive metro areas, with the median home price climbing 8.5% over the past year to about $1.45 million.
Seven of the top 10 priciest markets were in California. The steep home-price appreciation in the Golden State reflects a broader problem with affordability. Across the US, annual home-price growth for existing one-family houses rose 4.9% to $422,100 in the second quarter, compared with a 5% year-over-year advance in the prior period. Nationally, 89% of metropolitan areas saw home-price increases in the second quarter.
"It's terrific news for homeowners who are moving ahead in wealth gains," NAR Chief Economist Lawrence Yun said in a statement. "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."