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Home prices explode in San Jose, other cities


In the nation’s most expensive housing market, San Jose, and several other major U.S. cities, home prices rose at an extraordinarily fast pace to begin the year, according to a new report by Attom Data Solutions.  

The median price for a home in the San Jose metro area rose by 33 percent year over year as of the first quarter of 2018, the company said.

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The median home price in two counties comprising San Jose’s metro area stood at $1.15 million in the first quarter of the year, up from $863,000 in the fourth quarter of 2017. Attom’s figure is actually lower than the median price in San Jose estimated by the National Association of Realtors. NAR pegged the median price in the San Jose market at $1.27 million at the end of 2017.

“It seems crazy, but that is what the data is saying,” said Attom Senior Vice President Daren Blomquist.

“It already had expensive housing, but this just ratchets it up to a new level,” Blomquist told Scotsman Guide News. “It is actually pretty scary to  see that type of a number, a 33 percent increase, because that is not sustainable.”

In San Jose, which is home base to Google and several other Silicon Valley tech companies, home prices are now 60 percent above their pre-recession peak, Attom said. Blomquist said price growth in San Jose began to slow to single-digit annual growth to begin 2017, but then rapidly accelerated again.

In the first quarter of 2018, some 60 percent of the homes sold for $1 million or more, Attom reported. Even distressed properties are drawing top dollar and multiple offers. On Thursday, the Mercury News reported that a burned-out property in the Willow Glen neighborhood that listed last week sold for more than $900,000, about $100,000 above the asking price.  

“It appeared the market was behaving rationally in San Jose in going back to single-digit appreciation, which is sustainable,” Blomquist said. “To see this pop of 33 percent after a quarter where we saw a 25 percent [year over year] increase is concerning that there is a bubble forming. I try to use that word carefully, but when we see those numbers late in the cycle in a market that is already very highly valued, it is hard to say that there is not something awry there.”

San Jose is not the only place where prices have climbed well above the last market boom. Other cities with record prices now include Houston (69 percent above the last market peak); Dallas-Fort Worth (67 percent above); Denver (62 percent above); and San Antonio (57 percent above), Attom reported.

Several other cities also saw prices accelerate rapidly year over year.

Among the 105 metropolitan statistical areas analyzed in the report, the other metros with the biggest year-over-year gains in the first quarter included Flint, Michigan, (up 20 percent); Spokane, Washington, (up 18 percent); Reno, Nevada, (up 17 percent); and Seattle (up 16 percent).

Blomquist said home prices in the Flint tumbled after the water crisis and have been depressed generally since the recession. He noted that the median home price in Flint was still just $102,000.

“It is basically 10 percent of San Jose,” he said. “It really didn’t have anywhere to go but up.” 


 

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