The median home price nationwide has risen to $229,400 in the second quarter. That is 8.2% higher from last year. But it is still way lower in comparison to the median home price in northern California. In the San Jose, California metro area which includes Silicon Valley, the median home price is $980,000 making it the area with the most expensive median-priced homes.
Moreover the Golden state is also known to include four out five most expensive housing markets in the country. The price is governed by several factors including rising rent and higher economic confidence but above all, the lack of inventory is the biggest reason why home prices are soaring high in areas like this.
"If supply were plentiful, prices wouldn't be rising as quickly in spite of jobs and rents rising," said Danielle Hale, director of housing statistics at the National Association of Realtors. "The supply is really the clinching factor."
He also added, "New construction is needed, particularly at the low and middle end." She also noted that first time buyers are going back in the market, making up 30% of the buyers in June.
While higher prices may mean owners gaining equity and it may be a good news to sellers, it can also negatively affect affordability. Nar says that to buy a $229,400 home with a 20% down payment a buyer would need an income of $41,427.
According to the National Association of Realtors Home prices are rising in 93% of U.S. markets and some areas have median home price that are way bigger than the average median price nationwide. So, according to CNN, Here is a list of median home prices of single-family homes in the five most expensive markets:
San Jose, Calif.: $980,000
San Francisco: $841,600
Anaheim-Santa Ana, Calif.: $685,700
Honolulu: $698,600
San Diego: $547,800
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