The national median home price is currently sitting at $229,400 which is just over an eight percent increase from last year. However, when you compare this price to the median in the San Jose area it seems like nothing. Currently in the San Jose metro area the median home price is sitting at the top of the nation at $980,000. This area includes Silicon Valley which is obviously has a large influence on this number.
While there are many reasons for this hefty median price, one remains king. Over other common factors like steadily rising rent prices and confidence in the market a lack of inventory has created this massive growth in price. The combination of all three makes this rising price quite understandable and could definitely be slowed down a bit if there were more homes available. Since supply is low however, all of the things San Jose has going for it give sellers a lot of leverage in the market.
Due to the current state of the market in this area many are saying that new homes in a low-medium price range is necessary. This is because of the slow sale pace due to the incredibly high prices. This is obviously a lot easier said than done and has been a constantly debated topic for the last couple years especially since more eyes are on Silicon Valley than every before.
There have been some new buyers making their way into the market, but with the prices so high this is expected to be a slow increase. For most people, $980,000 for a first home is probably going to be too much. Many are wondering if this will open up more opportunities for companies drawing new talent in areas like Austin, TX where the cost of living all around is much more manageable. An exodus of young companies to affordable and trendy areas could potentially be the fastest way to impact the current state of the market in the San Jose area (especially Silicon Valley). It’s a bit hard to tell how likely this is in the short term however.