The Bay Area’s home prices just hit a new all-time high.
Silicon Valley and San Mateo County are the first two areas in the U.S. to boast $2 million median home prices, according to the National Association of Realtors.
The news did not come as a surprise to the Bay East Association of Realtors, a group that tracks the region’s home prices and sales.
“It’s compelling. It’s interesting. It’s going to grab some headlines. But the bottom line is it comes down to location, location, location,” said David Stark with the Bay East Association of Realtors.
The Bay East Association of Realtors represents about 6,000 real estate professionals in California.
Stark told NBC Bay Area that buyers seem to have come to accept current interest rates and are willing to pay higher monthly mortgage payments.
“At the same time, we’re seeing more supply come on the market, which is telling us that sellers are also going to be willing to pay a little higher than what they’re doing for their monthly mortgage payment. That’s important because the seller of today is going to be the buyer of tomorrow,” he said.
San Jose is seeing some of the highest increases. In the third quarter of 2023, San Jose home prices jumped 11.6%, according to The National Association of Realtors. The median single-family home price is now about $2 million.
After a small decrease, San Francisco home prices also jumped up 8.5% to $1.5 million.
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Stark said it’s a clear case of supply and demand.
“Buyers are willing to pay a premium. We still have a limited supply, and when we see sales prices hitting these record-breaking numbers, it’s to be expected in an area where a lot of people want to live,” he said.
While the news may have homebuyers groaning, there is some good news for home sellers. Stark said Bay Area residents may see even steeper price hikes if interest rates continue to drop as expected in the coming weeks.
To see the full report, visit nar.realtor.
