An article in this mornings San Jose Mercury News discussed the increase in sales and the median price of homes. In Santa Clara County the median sales price in May rose 6.4% from April 2010. However, it's because 54% of homes sold were over $500,000 versus 34% in the same period last year.
Now, this ties in nicely with the other recent report that the sales of million dollar homes has risen recently. This can be seen in Los Altos where entry-level homes priced from $1 - 1.5 million have been selling with multiple offers and many going over their asking prices. Similar behavior can be seen in neighboring markets including Mountain View, Palo Alto, and Sunnyvale.
The really good news is that most of these higher end sales are NOT driven by the tax breaks because the homes are priced too high or the borrowers are making too much money. So that means the market strength is built on solid buyers with the jobs and income to buy without incentives.
Based on the market activity in Los Altos, I expect this strength to continue into the summer and through the end of the year. We'll probably see typical slowness as the year comes to and end but 2010 should end with our local market back to being strong and balanced.