07/31/2018
Home prices grew faster in Silicon Valley than anywhere else in U.S. last quarter
Prospective homebuyers attend an open house in San Jose, Calif., on Sunday, Feb. 25, 2018. The median home price increased faster in the San Jose area than anywhere else in the country, according to a new study. (Randy Vazquez/ Bay Area News Group Archives)
By MARISA KENDALL | [email protected] | Bay Area News Group
PUBLISHED: July 28, 2018 at 6:00 am | UPDATED: July 30, 2018 at 2:28 am
Silicon Valley homeowners saw their wealth balloon faster than owners anywhere else in the country last quarter, according to a new study that underscores just how rich on paper property has made some residents here.
The median price of a home in the San Jose area, which includes Santa Clara and San Benito counties, jumped 25 percent from a year ago, according to ATTOM Data Solutions’ Q2 2018 U.S. Home Sales Report. The San Francisco area, which includes San Francisco, Alameda, Contra Costa, San Mateo and Marin counties, was fourth on the list, with gains of 14.2 percent compared to last year.
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“The numbers are actually fairly astounding, even for San Jose,” said Daren Blomquist, senior vice president of ATTOM Data Solutions.
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That’s great news for local residents who own homes and have watched their wealth soar in recent years. But for many struggling to buy in today’s turbocharged market, the latest increases push the dream of homeownership even further out of reach.
Property database ATTOM Data Solutions analyzed 122 metro areas in its report, and ranked the top five where prices are soaring. San Jose and San Francisco are seemingly obvious high-scorers, but two more surprising regions also made the list. Flint, Michigan ranked second, with median prices up 23.7 percent from a year ago. Seattle and Boise, Idaho tied for third, with prices jumping 14.3 percent.
In the Bay Area, homeowners who cash out make big bucks. Sellers in the San Jose region made average gains of 116.6 percent when they sold their homes — the highest of 147 metro areas analyzed. San Francisco was second, with sellers making average gains of 85 percent.
Wannabe homeowners who experience sticker-shock when looking at Bay Area prices have two options, said real estate agent Homa Saleh of Keller Williams, who mostly represents buyers in the San Jose area.
“I tell them just wait. If you can’t find a property that’s in your budget, I wouldn’t go too much above asking price because it might not appraise,” she said. “Or go for properties that may need a little bit of work.”
Blomquist credited the spike in Bay Area prices to the increase in the number of sales over $1 million, $2 million and even $5 million.
In the San Jose metro area, the median sale price for a single-family home or condo last quarter was $1.2 million, according to ATTOM. In the San Francisco metro area, it was $925,000.
But overall, U.S. home prices are increasing more slowly than in the past. The national median sale price for a home or condo was $255,000 in the second quarter of this year — that’s up 6.3 percent from a year ago, but it marks the slowest annual appreciation since 2016.
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Eighty of the 122 metro areas studied saw their median home prices grow more slowly last quarter, including Los Angeles, Chicago, Dallas-Fort Worth, Houston and Philadelphia.
Not surprisingly for those who have been keeping track of sale prices in the Bay Area, San Francisco was one of 42 metro areas analyzed that bucked the trend, seeing appreciation accelerate faster than the previous quarter. New York, Washington, D.C., Boston and Detroit also made the list of outliers. Despite it’s sky-high year-over-year appreciation, the San Jose area’s prices actually grew more slowly last quarter than the quarter before.
Bay Area homeowners also are holding onto their properties longer than those in other parts of the country. The average seller in the San Jose area had been in the home 10.6 years before selling, and the average seller in the San Francisco area had been in the home 10.5 years, compared to a national average of eight years.
“People are just staying put longer and not selling,” Blomquist said. “It’s also contributing to the lack of inventory for … homebuyers who might otherwise move into those homes.”
