Owning a million-dollar home isn’t the rarity it used to be.
The share of homes valued at more than $1 million has surged more than fourfold since 2002, according to new data from real estate site Trulia, which analyzed the luxury real estate market in the top 100 U.S. metropolitan areas. Across those regions, about 4.3 percent of homes are now worth at least $1 million, compared with about 1 percent in 2002, said Trulia senior economist Cheryl Young.
Rising real estate values since the housing crisis have bolstered the price tags of many homes. Trulia found that $1 million doesn’t necessarily denote a “luxury” home these days. In some cities — think San Francisco — they’re the norm, rather than a marker of top quality. That puts pressure on lower-income buyers who can’t afford to keep up with rising property prices, while cutting the amount of inventory available at prices below $1 million.
The share of homes valued below $1 million is “decreasing at a rate we’re surprised by,” Young said. “It was 98.9 percent in 2002, and now it’s 95.7 percent. That is pretty shocking.”
Rising real estate values, tight inventory and a lack of new construction are contributors the surge in million-dollar homes. Yet another factor may be at play: rising income inequality, which has benefited the bank accounts of America’s richest families.