The share of million-dollar homes is steadily increasing across the U.S., making them middle-class options in some large cities, reports Yahoo! Finance.
According to Redfin, the percentage of homes valued at $1 million or more has increased to 8.2%. That’s up from 7.3% in February and just below the peak of 8.6% in June 2022. The company analyzed 90 million homes. About 7.46 million units were valued at over a million dollars.
According to a LendingTree report, two California cities have larger percentages of $1+ million homes, in comparison with those under the seven-figure mark: San Jose (66.28%) and San Francisco (52.91%).
In Los Angeles, 26.48% of homes are valued at $1 million or more. In San Diego, it’s 23.15%. In Seattle, 18.70%.
These seven-figure homes aren’t luxurious, necessarily. They’re simply the norm. This is forcing many homebuyers to opt for more expensive dwellings.
“There are a lot of areas, especially really expensive areas, at this point where million-dollar homes have not only become more common, they’ve also — for lack of a better term — become more middle class,” Jacob Channel, report author and LendingTree’s senior economist, told Yahoo Finance.
Median home sales price in Santa Clara County, Silicon Valley is located, was $1.8 million in Q2. The monthly mortgage would be around $9,900 at today’s rate, and a 20% downpayment of $360,000.
Multi-million dollar homes are outnumbering sub-$1 million homes by quite a bit. In the six-month period reported July 15, 391 units sold between $3 million and $4 million. Only 285 units sold for less than $1 million.
And despite what we’re hearing about San Francisco, a housing recession, price drops, and a mass exodus, the median home price there is $1.335 million. The monthly mortgage for a home at that price would be $7,307. That assumes a 20% down payment at today’s seven-plus rates.
During the same six-month period reported on July 15, 897 units sold for over $1 million in San Francisco. That includes 10 properties for over $10 million. Only 100 units sold for less than $1 million.
All-cash purchases, which reached a 9-year high in April 2023, are making matters more difficult for average folks.
“More people are buying homes all cash than they have in recent years,” Patrick Carlisle, chief market analyst for the San Francisco Bay Area at Compass, said. “Well of course, that doesn’t help normal people because normal people can’t afford to buy something all cash… The fact that normal people — school teachers and firemen and policemen and the people who work in stores — can’t afford to live in the county in which they work, that’s not good and it’s not a healthy social situation. It’s very troubling.”
Follow NEXT on LinkedIn for the latest industry news and executive intel.
