A $1 million starter home is now the norm in more than 200 US cities
A $1 million starter home is now the norm in more than 200 US cities
The number of US cities where first-time homebuyers are faced with at least a $1 million price tag on the average entry-level home has nearly tripled in the past five years, according to new research.
The number of US cities where first-time homebuyers are faced with at least a $1 million price tag on the average entry-level home has nearly tripled in the past five years, according to new research.
A Thursday report from Zillow indicates that a typical starter home is now worth $1 million or more in 237 cities, up from 84 cities in 2019, underscoring America’s ongoing home affordability crisis.
“Affordability has been strained across the board,” Orphe Divounguy, a senior economist at Zillow, said. “We see the largest number of million-dollar starter homes in expensive coastal markets. We see them in markets with very low homeownership rates and we see them in markets with more building regulations.”
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California?
(checks notes)
More than 100 of the 200 are in California. :) Next closest is New York at 31.
Seems like a mostly California problem.
It’s not just a California problem. It’s a coastal city problem.
It’s not really shocking. The coast is valuable and limited. Living in an expensive coastal town isn’t really “starter home” material.
You wouldn't say that if you saw what they're selling for a million dollars. House built in the 1940’s with no maintenance except paying off the inspector not to condemn it? Yup that's a million dollars. Falling into the ocean because of coastal erosion? It has an extra bathroom, it's 1.5M.
I joke obviously but I'm not that far off either.
Actually, I’d be saying that even more.
People aren’t buying the house. They’re buying the location/
I mean, the coasts aren't really that densely populated. If we build nicer cities there would be plenty of potential space.
Instead we build shitty suburbs and sprawl, which will always lead to awful, expensive cities
Sure, there are remote coastal areas, but nearly all of Americas most important cities are coastal
this reminds me of the then they came for me thing. I remember when you could pick up a cheap home if you moved to like iowa. Its not as expensive but its not cheap like before.
Yep. I'm about as smack-in-the-middle as you can get and our home has doubled in value since 2016.
I bought my house a year ago and its estimated value has gone up 50% since then (and the estimate isn't even aware of all the renovations I've been doing). It's meaningless since I bought it for cash and I'm not going to sell it (mainly because I then wouldn't be able to find any other house to live in for a reasonable price), but it's kind of nice to know personally even if it is a symptom of an ongoing social calamity.
don't your taxes go up if you valutation goes up? I personally want housing in general to just keep up with inflation so I can buy and sell as needed and basically have it hold the value I put into it. If it goes up faster then I might get priced out. Slower and I will lose what I put in.
don’t your taxes go up if you valuation goes up?
Not really where I live, anyway. Here, the total tax burden is determined and then the relative burdens are apportioned to individual homes based on their relative values. My home's value went up because everything in this township went up by about that percentage. It is an incentive against improving your property, though, since if your house's valuation increases relative to other homes, you will get hit with a bigger share of the total tax burden.
My township has an additional issue: the local school district is allowed to collect whatever total amount of money they want each year, not subject to approval by the council (and the school tax by far makes up most of the total tax burden). The only thing preventing them from raising the school tax to absurd amounts is that the school board is re-elected every year and too much school tax would get them voted out (most of them get voted out every year anyway, largely because of the school tax as it already stands). I'm not bothered by it because our schools are among the best in the state, and are the primary reason houses here are in such great demand. As a school bus driver, it's also what pays my own salary.
Even then. If housing goes up faster than inflation and this is especially bad if its faster than your pay, then if you want to buy a place down the line and then sell your current place. Its going to be harder to swing or impossible.
Lol my pay goes up 2.8% per year and the Teamsters act like they won us a victory with that.
Systemic issue, California is just showing the rot stronger than other places. It's a growing issue for the whole country.
Texas is getting hit hard because it's gone from very affordable to super expensive quickly.
Homes in my area have tripled in cost over past 5 years.
super expensive
There are very few places in Texas that are super expensive.
I am more focussed on the term “sorry affordable”
So you're not from Texas then
Not from Texas, for sure. But I can say with confidence that there are very, very few places in TX that are "super expensive" compared to California, which was the subject at hand.
I didn't look at the list, but housing prices are out of control in a lot of places, even if they haven't hit that $1 million mark yet. A $750k starter home is just as absurd and out of reach for the vast majority of Americans.
We're telling young people not to have kids and not to buy homes. And it's everywhere, not just California.