Homebuyers just got another grim new statistic: Average home prices in 11 housing markets now exceed $500,000

Across the nation, home prices have soared during the pandemic, as low home inventory ran into surging demand. Fervent competition ensued, and home prices have since gained 19.2% over the past 12 months, locking many would-be homebuyers out of the market. 

But while prices have been rising most everywhere, some housing markets have become prohibitively expensive to some prospective buyers. A recent analysis by online real estate and financial planning site OJO Labs found that a housing price benchmark once considered rare is becoming increasingly common, as average home prices top $500,000 in more and more cities.

Who’s in the club?

Austin is the newest arrival in the exclusive club, according to OJO Labs’ survey, which crunched the numbers of March final home sale prices in America’s largest cities.

The list now includes 11 metro areas. Average prices in some of these cities were already well above $500,000 before 2020, while in others they have soared spectacularly since the pandemic started.

Here is the full list:

1. San Francisco (median home price: $1.3 million)
2. San Diego ($825,000)
3. Los Angeles ($720,000)
4. Seattle ($626,000)
5. Denver ($565,000)
6. Boston ($560,000)
7. Sacramento ($550,000)
8. New York ($520,000)
9. Portland, Ore. ($505,000)
10. Salt Lake City ($503,000)
11. Austin ($500,000)

Some of these cities, including Austin, San Diego, and Denver, have seen home prices rise more than 20% over the past 12 months. In Salt Lake City—which has enjoyed a population and job market boom during the pandemic—prices are up over 30%.

The affordability crisis

At the pandemic’s outset, homebuyers flooded into the market, taking advantage of historically low mortgage rates. For months, locking in low mortgage rates served as a strong incentive for homebuyers, despite rapidly rising housing prices. 

In the first few months of 2022, mortgage rates have begun rising at a record rate, which is beginning to cool the housing market. But for the rest of this year and probably into 2023, rising home prices will likely slow, yet not decline—meaning that prices will continue to increase, albeit at a slower rate than in the recent past.

This means that more cities are poised to join the half-million-dollar club, and those already in it are likely to get even less affordable.

“Prices will continue to grow in the short term, which means the number of housing markets in that $500,000-or-above range could grow over the next few months, since there are a number of markets in the $400,000-to-$500,000 range,” Chris Heller, chief real estate officer at OJO Labs, told Fortune.

In some of the $500,000 cities where costs are highest, homebuyers may have to settle for prices that were unthinkable two years ago. In San Francisco, for instance, studio apartments selling for $540,000 are still so cramped that beds must be retracted into the ceiling during the day.

Cities close to joining the club include Las Vegas and Phoenix. Average home prices in these cities are well over $400,000, and both have seen prices go up nearly 30% over the past year.

But higher mortgage rates and an expected housing market cooldown could make prices normalize, leading to a smaller club over the next few years.

“The market does appear to be cresting as more rates rise, so it should then slow down, and we may even see the list shrink over time,” Heller said.

There will be a cumulative effect to gradually reduce prices, according to Heller. With less competition for homes each month due to higher mortgage rates, listings will eventually grow and housing costs will begin to decelerate at a faster rate over the next several months.

“When inventory starts to build, sellers have to be more competitive in their pricing, and that’s where you see the rate of appreciation slow down or eventually go down,” Heller said.