“Well, this is a surprise,” said absolutely no one. Four out of the top five priciest housing markets in America are in California, according to the National Assn. of Realtors’ latest quarterly report. The San Jose, Calif. metro area, where the median existing single-family price was $899,500, ranked No. 1; followed by San Francisco with a median price of $769,600 (No. 2), Anaheim-Santa Ana, Calif. with a median price of $691,900 (No. 3) and San Diego with a median price of $504,200 (No. 5). It’s not a surprise because California has remained at the epicenter of the residential real estate boom this year, with prices now well above levels of the last few years. The proof: the statewide median price of an existing, single-family detached home was up 6.6 percent from the revised $428,700 recorded in June 2013, and the statewide median home price has increased year over year for the previous 28 months, according to C.A.R. That’s two full years of consecutive year-over-year price increases.

Of course, housing prices in California only paint half the picture. The other half is housing availability and affordability—which continue to be two issues for many buyers in high costs areas like the four markets mentioned above. Noted C.A.R. President Kevin Brown: “While June home sales rose at the statewide level, the market is still constrained by tight supply and low housing affordability in areas of high demand, where job growth is robust and international buyers have a strong presence. Overall, however, with inventory improving and home sales slowly moving back up, the market is more balanced, and we could see further market normalization in the upcoming months as interest rates remain at the lowest levels we’ve seen so far this year.”

Do you agree? Is California’s housing market becoming more balanced? Where do you think the market needs to go next for optimum health?