Dedicated locality research platform
Dedicated locality research platform
Enter your email address and you will receive
a link to reset your password
In a real estate market that has seen a steady surge in prices, potential home buyers are grappling with limited options within their price range. The first half of 2023 has witnessed a remarkable upward trend in home prices, fueling frustrations among buyers longing for more affordable inventory. For many, it feels as though the majority of houses listed on popular platforms like Zillow come with a seven-figure price tag, and in certain areas, that perception is a harsh reality.
According to a recent report by real estate website Point2, five major cities—Los Angeles, San Francisco, San Jose, San Diego, and Boston—face an overwhelming presence of million-dollar listings, accounting for more than half of the available homes for sale. Point2's analysis focused on 30 of the largest U.S. markets, encompassing the 100 most populous cities with a minimum population of 500,000, to determine the cities with the highest concentration of million-dollar properties.
Not surprisingly, California cities dominate the top rankings, with Los Angeles taking the lead by a significant margin. Almost 64% of homes listed for sale in Los Angeles have price tags exceeding $1 million. However, despite the prevalence of these high-priced listings, the median selling price for homes in May 2023 was $926,000, below the million-dollar mark. Only two cities out of the analyzed markets, San Francisco and San Jose, boast median sale prices surpassing $1 million, with homes selling for $1.3 million and $1.2 million, respectively.
The luxury real estate market in Los Angeles stands out with nearly 12% of listings categorized as "ultra-luxury" properties, priced at over $5 million. In contrast, San Francisco and San Jose account for just 7% and 1% of such listings, respectively.
Point2 also evaluated midsized and small cities, finding that Glendale, Huntington Beach, and Oxnard, all in California, claimed the top spots for midsize cities. The small city rankings were more geographically diverse, with East Honolulu, Hawaii; Bozeman, Montana; and North Bethesda, Maryland, having the highest proportions of million-dollar listings.
Despite persistent inflation impacting consumers' finances and a gradual rise in mortgage rates, the demand for luxury homes remains robust. Purchasing a million-dollar home through a mortgage requires a substantial income, as evidenced by the CNBC Make It mortgage calculator. Assuming a 20% down payment on a $1 million property and a 6.5% interest rate, buyers would face a monthly mortgage payment slightly exceeding $5,000. Following the common budgeting guideline of spending no more than 30% of income on housing, one would need a monthly salary of approximately $15,000 or an annual income of at least $182,000 to afford a million-dollar home.
As the real estate market continues to test the limits of affordability, prospective buyers are left yearning for a more balanced supply of homes within their financial reach.
Propscience is India’s dedicated property news portal. We cover the latest events, news, trends, deals, new launches and more.
All our services and tools are completely free of cost and available 24X7!
