The home market may have softened in the past year. A tremendous ballooning of prices in most markets during the past two years and high mortgage rates have undercut the rate at which the home market has been soaring. In some markets, activity has slowed. In others, prices have started to fall. Despite these troubles, home prices in San Jose, the most expensive market in the United States, remain above $1.3 million. (Click here for the 10 cities where homebuyers make the highest down payments.)
In Realtor.com’s “January Housing Report: Buyers Gain Bargaining Power but Remain Deterred by High Rates and Prices,” Danielle Hale, chief economist for Realtor.com, commented, “Home buying in January remained relatively sluggish as sales slowed, inventories rose, and price growth leveled off. These trends reinforce that while buyers are gaining an advantage in the market, they are still being deterred by high home prices and financing costs.”
Realtor.com also mentions that stalled housing prices allowed some buyers to re-enter a market they left several months ago. One good measure of housing market strength is “median days on the market.” Last month, this figure was 75, up 13 days from a year ago.
Cities well above 75 were Austin (80), Las Vegas (80), San Antonio (80), Pittsburgh (87), New York (89), and Kansas City (90). Presumably, this has brought some bargains to the markets.
The median listing price of a home for sale nationwide was $400,000, near an all-time high. Markets well above that were Los Angeles at $884,000, San Diego at $900,000, San Francisco at $972,000 and San Jose at $1,349,000.
San Jose has two signs of strength. The first is price. The other is median days on the market, which are only 55. Despite these home prices, demand is brisk.
Perhaps San Jose has advantages because it is the wealthiest city in America. Residents’ income has been driven by tech company money and VC financers. Although some companies in these sectors have posted layoffs, tens of thousands of extremely rich people are still in the area.
San Jose is America’s most expensive housing market, and that will not change.
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