The California housing market remains in a state of flux, with home prices continuing to climb despite rising mortgage rates. The national average home value reached $368,720 in May 2026, marking a 0.8% increase from the previous year. While some areas have seen price declines, others are experiencing substantial growth, driven by high demand and limited supply.
Using data from Zillow, we’ve identified the cities in California with the fastest-growing home prices. These rankings are based on the dollar change in the Zillow Home Values Index for all homes over the 12 months ending in May 2026. The analysis includes data from 50 cities and towns across the state, providing a comprehensive overview of the current market trends.
Top cities with the fastest-growing home prices
The following cities have seen the most significant increases in home values over the past year. These figures highlight the ongoing demand for housing in California’s most desirable locations.
San Francisco-Oakland-Berkeley metro area
The San Francisco-Oakland-Berkeley metro area continues to be a hotspot for rising home prices. Cities like San AnselmoBelmont and San Carlos have seen substantial increases. For example, San Anselmo’s typical home value rose by $63,701 (3.9%) over the past year, while Belmont saw a $66,147 (2.9%) increase. These cities are part of a broader trend in the Bay Area, where tech industry growth and limited housing inventory are driving up prices.
Los Angeles-Long Beach-Anaheim metro area
The Los Angeles-Long Beach-Anaheim metro area is also experiencing significant price increases. Cities like El SegundoLadera Heights and Bradbury have seen notable gains. El Segundo’s typical home value increased by $63,996 (3.8%), while Ladera Heights saw a $64,081 (3.9%) rise. These increases reflect the ongoing demand for housing in the region, particularly in areas with desirable amenities and proximity to employment centers.
San Jose-Sunnyvale-Santa Clara metro area
The San Jose-Sunnyvale-Santa Clara metro area is known for its high-tech industry and correspondingly high home prices. Cities like CupertinoStanford and Saratoga have seen substantial increases. Cupertino’s typical home value rose by $65,980 (2.2%), while Saratoga saw a $88,304 (2.2%) increase. These cities are part of a broader trend in Silicon Valley, where the tech boom is driving up demand for housing.
National trends and market dynamics
The national housing market is setting new records, with the median home price reaching an all-time high. In California, cities like San Francisco and San Jose are seeing some of the most dramatic increases. San Francisco’s median home price hit $1,724,835 in June 2026, a 9.2% jump from the previous year. This trend is driven by a combination of factors, including high demand, limited supply, and the influx of wealthy individuals seeking luxury properties.
The luxury home market is playing a significant role in driving up prices. In cities like West Palm Beach Florida, the median price for June 2026 reached $548,358 an 8.6% rise from the previous year. This increase is attributed to the favorable tax environment, sunny climate, and beachfront lifestyle that attract high-net-worth individuals. In West Palm Beach, a typical luxury home sold for $4.5 million during the three months ending in May, 8.9 times more than a typical non-luxury home.
The differential between luxury and non-luxury home prices is less pronounced in the Bay Area, where buyers paid 4.3 times as much for a property in the luxury category. Nationwide, luxury buyers spent 3.6 times as much. These trends highlight the ongoing demand for high-end properties and the impact of wealthier buyers on the housing market.
The California housing market remains dynamic, with significant price increases in many cities. Understanding these trends can help buyers, sellers, and investors make informed decisions in a rapidly changing market.
