Trulia's McLaughlin on Rise of Million Dollar Homes (Audio)

and lead because business is everywhere. Prepare here. The SMP five hundred index up twelve to two thousand and fifty two, a gain of six tenths of one percent. Naz Stack up fifty seven, a gain of one point two percent. Down Industrial is up sixty five, a gain of four tenths of one percent. The yield on the ten year one point eight four percent. Gold down a dollar forty leounced to twelve fifty three, a drop of point one percent.

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and Pim Fox on Bloomberg Radio. In the world of residential real estate, when you use the phrase million dollar listing, it conjures up images of ultra wealthy house hunters looking for those mansions. Well, that may not be the case any longer today, truly. The real estate site released a report ranking the metro areas in the United States that have had the largest increases in the share of million dollar homes since twenty twelve. Here to tell us more

is Ralph McLaughlin. He is the chief economist for Trulia dot com. Ralph tell us the results of this study and why it may surprise just about everyone. Well, we found that the metro's that had the biggest increase in the share a million dollar homes were right here in the Bay Area, in my own own backyard. In fact, the top three or here San Francisco, San Jose in Oakland. Uh, San Francisco has just game busters. Um. Four years ago only about homes were at the million dollar mark, and

now it's close to sixties. So it's so it's tripled down. In Silicon Valley and Sutose a similar story from about six percent, so really big increases. Most of the metros that have seen the biggest increase in million dollar homes from the West, but New York makes a list at number eight, growing very modestly from about seven. So that's that was kind of surprised to see how many were out here in the West as opposed to in the northeast.

Chris Ralph, what's interesting about these million dollar homes is that it's a It may be a big part of what's in San Francisco now, but it's a very small portion of California overall, or even the country overall. However, I think that's one of the issues in other experts we've talked to is the issue for California is so many Californians are being priced out of the housing market because prices have risen so much. Maybe not to a million dollars, but a home that used to be to

fifty might be five thousand, etcetera. We got the existing home sales report today in April they were up one point seven about five and a half million units at an annual rate. Our rising home price is going to slow that down. What do you see broadly? Yeah, well, we think low inventory is really you know, slowly slowing me down the sales. And part of that liw inmentary is because in many markets prices are growing growing out of reach, especially growing out of reach of a middle

class buyers. So you know, for example, you know, in the in the northeast New York, Boston, you know, um, a middle class buyer would have to spend you know, about the income on a home out here, it's as high as fifty to six. So we think that that's

going down. But but I think the uh, you know, the the other issue is, um, you know, with with inventory being so low, it kind of creates a grim block effect that if it's difficult for someone to move into a different house because it's too expensive, they're not going to sell their own house, and so it creates this traffic jam so to speak, in the market where it's difficult for people to trade. And the fact that

at this stage in the economic cycle. You know, you would expect home sales to be you know, a little little bit higher, probably over the you know, the six million mark Ralph You're in San Francisco, so that's home to Bloomberg and nine sixty am. You mentioned Boston home to a m New York. You looked at the concentration to five neighborhoods that witnessed a great increase tell us where. Yeah, so Brooklyn is the place to be if you're looking

for recent million dollar homes. I was very surprised how concentrated it was in the New York metropolitan area, and many of the other markets we looked at neighborhoods were quite spread out. As far as those that had the biggest increase in million dollar homes in New York, it was exclusively in Brooklyn. In fact, if we look, you know, look at the top top five neighborhoods, Bedsty, Greenwood, Crown Heights, green Point, Burropark All Brooklyn all increased pretty pretty quickly.

You know, for example, Crown Heights went from about three of homes at the million dollar market tow over half today. So that that is a remarkable increase in more than you know, just just what general health of the economy would would would suggest. But you know, for people who can afford to buy a million dollars homes, if you look at San Francisco, Santa Say, you've got people who

work in the in the tech industry, right. Uh, if you can have afford to buy a million dollar plus home, how much does it matter to you what the prices? Does it? Even does financing? Does a mortgage rate ed to you at all? Because at that level, you've got a lot of means. If you can afford to buy a home at that price or higher, yeah, well you're you're certainly certainly right. So for most persons who have a healthy salary in the tech industry, it's not really

that much of a problem. But you know, only seven of our workforces in the tech economy, so there are a lot of others that that don't work and many of them and we think are being impacted by by rising rising prices, And it wasn't making it difficult for them to get into homes, especially first time home buyers because oftentimes that that first time HomeBuyer price point means that in order to save up for that down payment, which could be you know, a hundred thousand dollars or so,

um you know, could could take ten, twelve, fifteen years, Robod, if you could just tell us a little bit quickly about Miami. Yeah, so, so Miami actually didn't make the top ten. It was it was close. Uh, you know, Miami saw many many neighborhoods um you know, increasing pretty quickly, especially in the Fort Wauterdale area, navarea Isle. Uh. You know, nearly all homes now are about a million dollar mark,

whereas four years ago only about half. But we also see pretty high concentrations in the downtown Miami and just outside downtown. We think some of that is actually driven by recent luxury condo development, um you know, of which is you know, attracting a noticeable share of actually foreign investors. How don't you want to hear about Seattle? Depressed me too much? Ralph McLaughlin, thank you for joining us chief economist at Trullia dot com. Million dollar homes becoming a

lot more commonplace across the country. I'm Cathleen's along with Pim Fox, thank you for joining us today. Let's thank Reggie Basil, our technical director, and our producer Samara Linga. This is Bloomberg Radio coming up? Bloomberg Law. It's brought to you by Deutschatkins PC. If you feel you've been unlawfully terminated, you all it's yourself to call the law firm of Deutsch Atkins Now. For a free phone consultation, call eight hundred