U.S., Bay Area Home Prices Hit New Record Highs in May
- Both existing and new U.S. home prices surpassed their all-time peaks in May, a respective $252,800 and $345,800.
- Home prices in the nine-county Bay Area climbed to $818,000, also a new high.
- Homes in Silicon Valley sold in less than four weeks in May and are frequently subject to bidding wars.
Intense demand for housing coupled with supply constraints pushed U.S. home prices to an all-time high in May, with properties leaving the market faster than ever before. Here in the Bay Area, home prices also reached a new peak last month, as buyers hit the market in full force.
A report from the National Association of Realtors says that the median existing home price was $252,800 in May, surpassing the previous high set in June 2016. New single-family home prices also climbed to a record high last month — $345,800, according to data from the United States Commerce Department.
In a statement accompanying the report, NAR Chief Economist Lawrence Yun attributed the high level of buyer interest to a thriving job market and low interest rates. Nationwide, homes sold in an average of 27 days, the fewest since the organization began tracking that statistic six years ago.
Bay Area single-family home prices mirrored the national trend, rising to a new all-time peak of $818,000 in May, according to a report from The Mercury News. Santa Clara County and Marin County home prices hit new highs last month, a respective $1,093,000 and $1,250,000. Home prices in Alameda ($805,000) and Sonoma ($600,000) counties matched their previous peaks.
Bidding wars are commonplace in Silicon Valley this spring and summer, as eager buyers compete for a limited number of homes for sale. “The market is nuts,” Pacific Union real estate professional Adam Touni told The Mercury News. “It’s become typical for properties to sell for $300,000 or $400,000 over asking.”
Bay Area homes also sold at a rapid clip in May, an average of 24 days in the San Francisco metro area and 25 days in San Jose, according to the NAR report. And in some coveted enclaves, the pace of sales is much faster. In South Palo Alto, Touni’s clients recently sold a 75-year-old Eichler home in just nine days, with six offers driving the final sales price $300,000 over the list price.
The inventory shortages that are plaguing both the U.S. and Bay Area housing markets are causing more potential buyers to delay or postpone their home searches, Yun said, as the number of home for sale dipped by 8.4 percent from one year ago. He noted a particular lack of supply in the most affordable range and said that current housing market conditions are “not sustainable in the long run.”