Hundreds of new million-dollar neighborhoods have sprouted up in the last three years
Recovery from the Great Recession might just as well be over if you’re looking at the pricey housing market.
Home values have been steadily increasing since the housing bubble burst a decade ago. Right now, they are at a record-high, with 1,280 $1 million neighborhoods across the country, according to Zillow. “Million-dollar neighborhoods” are where 10 percent of the homes are worth at least $1 million.
More than a third of those neighborhoods have sprouted up in the last three years. Zillow says nearly 1 in 20 residential zip codes meet these standards right now, but some locations are seeing more than others. Check out the map below…
“The U.S. median home value is just over $200,000, but in San Francisco, Los Angeles and other expensive cities, homes are worth much more,” says Zillow’s chief economist Svenja Gudell. “As home values hit seven figures in many neighborhoods, it’s going to have real impacts on affordability for middle-class homeowners whose incomes haven’t kept up, and this imbalance especially has implications for people on fixed incomes whose property taxes are rising along with their home value.”
Almost 3-in-4 San Francisco zip codes meet this threshold, while other neighborhoods like those in St. Louis and Cincinnati are $50,000 below the national median. These metro areas haven’t seen a $1 million neighborhood in the last decade.
New York has seen the highest rise in million-dollar areas with 20 in the last year (53 in the last three years). Los Angeles grew 13 more and Seattle saw nine more pop up in the same time frame.
San Jose, California, has the most expensive home value index, according to Zillow, with more than $1 million and the second-highest is San Francisco with $854,300. Nationally, it’s $200,400. A few cities don’t have any million-dollar neighborhoods: Indianapolis; Columbus, Ohio; and Pittsburgh. Cleveland and Cincinnati only have one each, while Las Vegas, Orlando, San Antonio and Charlotte, North Carolina, have two.
Low-income Americans suffer the most when it comes to home-buying
The group that has it the hardest, though, is the one that can’t afford to buy anything. Cities are sprawling with some of the biggest pay disparities, but major cities have a really hard time housing residents that make minimum wage.
For those low-income Americans that are trying to settle down and buy a home, they can’t afford it. Not necessarily because of their income (that could be part of it), but because the cheap homes that are being sold are being bought by middle-to-high earners. The least-expensive homes are gaining value, but the ones that need it the most can’t afford them. They’re even being priced out of the homes they should be able to buy.
Affordability is usually a concern among potential homebuyers, usually those who are would-be first-timers, like millennials. Prices are rising faster than people can financially accommodate for. Unfortunately, it doesn’t look like this trend is slowing down anytime soon, as rising mortgage rates will hinder a lot of home buying this year.
Article last modified on September 9, 2017. Published by Debt.com, LLC . Mobile users may also access the AMP Version: Won’t You Be My (Rich) Neighbor? - AMP.