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REALTOR®: Silicon Valley continues to see double-digit rise in home prices

Wednesday, May 14, 2014

Median home prices continue to climb for both single-family and condo/townhome residences in much of Silicon Valley, but there's growing concern about the rising cost of home ownership in the region.

According to the latest report from MLSListings Inc., compared to April of last year, single-family residential median price levels remain positive in four of the five counties served by the multiple listing service. The April 2014 median home price dropped 1 percent in Santa Cruz County, but was up 19 percent in Monterey County; up 22 percent in San Benito County; up 14 percent in Santa Clara County; and up 14 percent in San Mateo County.

April single-family home sales were up 30 percent from March in both Santa Clara and San Mateo counties. Compared with April 2013, home sales were down 5 percent in Santa Clara County and down 4 percent in San Mateo County.

Inventory is steadily catching up but continues to be an issue. Compared to March 2014, April's inventory increased 17 percent in Santa Clara County and 4 percent in San Mateo County. From April last year, inventory was up 4 percent in Santa Clara County, but down 17 percent in San Mateo County.

"We are seeing more sellers coming into the marketplace because they are encouraged by the rising home prices. However there's a great concern that with these rising prices it's getting to be more difficult to buy a home in Silicon Valley," commented David Tonna, president of the Silicon Valley Association of REALTORS®. "The state's healthy economy has led to phenomenal job growth, which has put a squeeze on affordability. Santa Clara County alone has experienced about a 14 percent job growth within the last three years. It's led to an increased demand for housing and the result is higher home prices," said Tonna.

A California Association of REALTORS® (C.A.R.) report released this week indicates in the first quarter of 2014 all counties in the state realized a double-digit year-over-year decline in affordability, as PITI (principal, interest, taxes and insurance) and the minimum annual income required to purchase a median-priced home rose more than 50 percent in the first quarter of this year.

According to C.A.R.'s Traditional Housing Affordability Index (HAI), 33 percent of home buyers could afford to purchase a median-priced, existing single-family home in California in the first quarter of 2014, compared with 44 percent in first-quarter 2013. The least affordable counties in California were San Mateo (12 percent), San Francisco (14 percent), Santa Barbara (16 percent), and Marin (16 percent).

In Santa Clara County, housing affordability was at 21 percent in first-quarter 2014, compared with 30 percent in first-quarter 2013. With the median home price at $808,000 in first-quarter 2014, the monthly PITI was $4,190 and minimum qualifying income was $167,560.


The Silicon Valley Association of REALTORS® (SILVAR) is a professional trade organization representing over 4,000 REALTORS® and Affiliate members engaged in the real estate business on the Peninsula and in the South Bay. SILVAR promotes the highest ethical standards of real estate practice, serves as an advocate for homeownership and homeowners, and represents the interests of property owners in Silicon Valley.

The term "REALTOR®" is a registered collective membership mark which identifies a real estate professional who is a member of the National Association of REALTORS® and who subscribes to its strict Code of Ethics.

Variations of this article have appeared in local area newspapers.

For further information, please contact Rose Meily at SILVAR Public Affairs, email , or phone (408) 200-0109.

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