”Survey says” looks at various rankings and scorecards judging geographic locations while noting these grades are best seen as a mix of artful interpretation and data.
Buzz: Here’s an odd measure of California housing’s unaffordability – the state is home to two out of every five U.S. residences valued at $1 million or more.
Source: My trusty spreadsheet analyzed recently released 2021 housing data from the American Community Survey by the Census Bureau for the 50 states and the District of Columbia.
California had 1.73 million homes valued at $1 million or more in 2021, No. 1 among the states. This collection of seven-figure residences is 41% of the 4.2 million counted nationally.
Next was New York with 390,238 million-dollar homes, and then Washington at 214,955, Florida at 204,092 and Texas at 166,306.
Consider California’s wealth concentration this way: Take the 49 other states plus D.C., and then subtract Florida, Washington and New York. The Golden State has more million-dollar homes than those 47 states and D.C. combined.
Consider that 23% of all California homes are worth $1 million or more. That’s also No. 1 among the states.
How crazy is that to most Americans?
Well, seven-figure homes represent just 2.2% of the housing stock in the other 49 states and D.C. So loosely speaking, a million-dollar price tag is 10 times more likely to be found in California.
Hawaii was No. 2 for its million-dollar-home share at 23.1%, then came D.C. at 23%, Washington state at 11.2% and New York at 9.3%.
And where is it least likely to find a seven-figure house? North Dakota had 0.5% of its homes valued in seven figures, then Mississippi at 0.6%, Iowa and West Virginia at 0.7% and Indiana and Kentucky at 0.8%.
By the way, seven-figure abodes aren’t easy to find in California’s economic arch-rival states: Texas was No. 21 at 2.5% of homes above $1 million and Florida was 18th with 3.6%.
Yet this eye-catching price point is exploding in some states as the pandemic era’s homebuying binge puffed up prices. It’s a reasonable bet that Californians cashing out huge home-price profits and taking their high-end housing tastes to other states is one reason why.
When you look at the expanded number of million-dollar homes between 2016 and 2021, California did rank No. 1 with 787,658 additions. Then came Washington state at 152,049, New York at 120,609, Florida at 88,106 and Texas at 79,672.
But ponder growth rates. California ranked only 22nd with 83% more million-dollar homes since 2016. That’s the same pace as the expansion of the entire nation’s supply of seven-figure housing.
The fastest growth was seen in Idaho where million-dollar home growth was up 444% – yes, that’s five-fold-plus. Then came Utah at 283%, Washington state at 242%, Colorado at 186% and Montana at 182%. Clearly, it’s a Western thing.
Texas was 18th at 92% and Florida was 26th at 76%.
Is this a trend that sticks?
The pandemic era’s historically cheap mortgage rates and long-running housing inflation helped to turn million-dollar homes from a luxury rarity to a far more common slice of the market – even in many places outside of California.
Mull what cheap financing meant.
A $1 million mortgage cost $4,194 a month at 2021’s average 30-year fixed rate loan of 2.96%. That’s a huge check to write, but it was 8% cheaper than the same mortgage at 2016’s average 3.65% rate.
However, that same loan at November 2022’s 6.8% rate means the payment soars 55% (in less than a year) to $6,519.
Next, contemplate 2016-21’s huge gains in home values.
California’s overall home values jumped 36% between 2016 and 2021, by census math. That gain ranked just 20th among the states.
Tops were Idaho at 95%, then Utah at 68%, Arizona at 63%, Washington state at 59% and Nevada at 56%. Again, it’s a Western surge.
It will be fascinating to see the million-dollar home market after the current homebuying downturn ends.
Jonathan Lansner is the business columnist for the Southern California News Group. He can be reached at email@example.com