Back-to-office mandates cause home price surge in top 10 cities: San Jose leads the charge

Remote work gave people the freedom to live wherever they wanted: no more commuting, no more being stuck in a city just because the office was there. But now companies are calling people back and that is changing everything. People are getting closer to work again and the real estate market in some cities is going crazy.

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Take Saint Joseph as an example. It's always been difficult to find a home there, but now? It's crazy. Buyers fight over the few available homes and pay well above the asking price. According to a Realtor.com analysis of 75 cities to see where homes are selling the most above asking price, San Jose tops the list in the U.S., with homes selling 6.2% above asking price. sale price. And get this: the median home price is a staggering $1.3 million.

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So why is this happening? Well, San Jose is close to Silicon Valley. Big tech companies like PayPal and Adobe are there, attracting tech professionals from all over. The demand for housing is through the roof. Lex Orosco, a real estate broker at Real Silicon Valley, told Business Insider that the market will only heat up as more people get closer to work. And as interest rates fall, even more buyers will come on board, driving up prices.

But it's not just about San José. Other cities, especially in the Northeast and California, are seeing the same thing. Hannah Jones of Realtor.com said many of these locations are “within walking distance of the region's major economic centers.” As companies return to hybrid or in-office setups, these areas are also feeling the pressure.

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Look at San Francisco: Homes are selling for 3.6% above asking price. Hartford, Connecticut? Buyers pay 4.8% more than the list price. Even Kansas City is being affected, with homes selling for 4.3% more than requested.

And the recent interest rate cut by the Federal Reserve? It will lower mortgage rates, giving more people the power to buy. But with so few homes available, prices could rise even more. Orosco believes we could see more homes on the market as rates drop, but it won't be enough to cool things down.

As companies drag workers back to the office, cities like San Jose are feeling the pressure. More people returning means more competition for homes and higher prices. It's already tight and the return to office life is making it even tighter.

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