Thursday, 18 April 2024

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Business News

There are more U.S. cities with $1 million homes than ever, Zillow says

There are more U.S. cities with $1 million homes than ever, Zillow says

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It’s not just first-time home buyers who are struggling to find an affordable house in today’s market riddled with high mortgage rates and home prices. The most expensive homes in the U.S. just keep getting more expensive—and today there are more cities with $1 million median-priced homes than ever, according to a Zillow report released Tuesday.

There are a record 550 U.S. cities where the typical home value is $1 million or more, according to Zillow. That’s up from 491 last year—a 12% jump— and median year-over-year price growth in these cities is 4.6%, meaning expensive homes are getting more costly.

“For homebuyers, the prevalence of million-dollar cities significantly—greatly—strains what is already the worst housing affordability since at least the 1980s,” Christopher M. Naghibi, executive vice president and chief operating officer at First Foundation Bank, tells Fortune. “Prospective buyers in these markets face higher barriers to entry, needing ridiculously large down payments and higher incomes to afford homes.”

Where are the most million-dollar homes?

By far, California is the state with the most “million-dollar cities”: There are 210 such cities there, including Los Angeles, San Francisco, San Jose, Santa Barbara, and San Diego. That’s not particularly surprising, considering the high-wage jobs and high cost of living that comes with being a California resident, experts agree. 

Indeed, California is also among the states with the highest density of Fortune 500 companies, including Apple, Google, and Meta. 

“Tech companies in Silicon Valley have also contributed to the rising housing prices in California,” Maureen McDermut, a realtor with Sotheby’s International-Montecito, tells Fortune. “It isn’t a surprise that housing competition in the state is fierce, which, coupled with low housing inventory, has pushed prices up significantly.”

Due to the “enormous economic growth” in major California cities, people with higher-paying jobs can afford more expensive homes, Tate Kelly, a broker with Coldwell Banker Warburg, tells Fortune. It’s just part of the housing Catch-22, in which only the wealthy can truly afford homes in the most expensive cities.  

“There is enormous economic growth where [these] companies are located,” Kelly says. “This means an influx of employees with high-paying jobs willing and able to spend more for their homes.”

The surge in California…

Click Here to Read the Full Original Article at Fortune | FORTUNE…


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