I love reading about the Bay Area real estate market as it provides both perspective and lessons in what NOT to do. The San Jose Mercury News ran a great story on the 19th that I will cite here.
- It takes household income of $216k to buy a median priced home, both attached and detached, ($1.085 million) in San Jose!
Zillow is predicting that San Jose’s median home prices will rise 8.9% this year to $1,128,500.
- In 2017, 68.5% of all homes sold in metro San Jose went for more than their asking price. How much more? The median amount was 6.8% more or $62,000!.
- Why is this happening? Supply continues to drop and is down to just 12 days in Santa Clara County.
- “This low supply continues to drive hungry buyers to bid up prices.”
- Kevin Swartz, an agent in Saratoga CA said, “With every home that sells, there are many buyers who missed out and are going to be writing higher offers on the next home—and can afford to.”
So, if there isn’t a shortage of buyers for $1 million+ homes in San Jose, there probably won’t be a shortage of buyers for our median price of $385k. Prices will continue to rise until supply increases substantially.