Homes that cost a million dollars or more are rare in most of the country but make up more than 20% of the for-sale market in San Francisco, Fairfield County, and San Jose. The typical million-dollar listing in New York is smaller than the average American home.
Close your eyes and imagine a million-dollar home. Depending on where you live, you might be picturing the modest three-bedroom down the street, or you might be thinking of a sprawling mansion. You might even be drawing a blank if you live in a market where million-dollar homes are almost unheard of. While a home listed for a million dollars might cause just a shrug in some parts of California and New York, million-dollar homes are few and far between once you get more than a couple hours’ drive from an ocean. To see what a million bucks buys across the country, we calculated the share of for-sale listings on Trulia priced at or above $1,000,000 in each of the 100 largest metros, as well as the typical size of homes priced at or near the million-dollar mark, all as of March 3, 2014.
In Most Metros, Million-Dollar Homes Represent Just a Sliver of the Market
Nothing drives home the huge differences in housing costs across the country more than how rare or common million-dollar homes are. Million-dollar homes account for more than 20% of listings in New York, neighboring Fairfield County, CT, and Long Island; in Orange County and Ventura County, on the southern California coast; and in San Francisco and San Jose. In fact, million-dollar homes make up close to half the San Francisco market, at 44%.
|#||U.S. Metro||Share of for-sale listings priced at or above $1,000,000|
|1||San Francisco, CA||
|2||Fairfield County, CT||
|3||San Jose, CA||
|4||Orange County, CA||
|5||Ventura County, CA||
|6||New York, NY-NJ||
|7||Long Island, NY||
|9||Los Angeles, CA||
|10||San Diego, CA||
|For the share of listings priced at or above $1,000,000 in all of the 100 largest metros, click here.|
But in 68 of the 100 largest metros, million-dollar homes make up less than 5% of the for-sale market, including the major metros of Philadelphia, Chicago, Dallas, Houston, and Atlanta. Furthermore, million-dollar homes are less than 2% of the market in 44 of the 100 largest metros. … continue reading0 comments
Income inequality is highest in Fairfield County, CT, San Francisco, New York, Boston, and Detroit. Overall, the most imbalanced U.S. metros tend to have worse housing affordability and slower job growth. But the trend is clear: the gap between the rich and poor has increased in 94 of the 100 largest metros since 1990 – and has even accelerated in the past few years.
Income inequality has been growing in America, driven by technology, globalization, and other factors. It’s caused tensions between the haves and have-nots, which often get played out at the local level, and these tensions have erupted into fights over housing affordability and public services.
Are growing income gaps limited to particular metros, or is this trend widespread? To untangle the facts about local income inequality, we compared the incomes of rich, median, and poor households in the 100 largest metros in 2012, 2006, 2000, and 1990, using Census data (see note below). A rich household is defined as being at the 90th percentile – which means being above 90% of all households in the metro; the median is at the 50th percentile, while poor is defined as at the 10th percentile. Our main inequality measure is the ratio of incomes at the 90th and 10th percentiles (the “90/10 ratio”), which shows the size of the gap between the rich and the poor. A higher value of the ratio means incomes are more unequal; among the 100 metros, the 90/10 ratio ranges from below 9 to above 18.
Taking this approach, we found that some metros are much more unequal than others, and the most unequal metros tend to have higher housing costs and slower economic growth. Despite these differences, income inequality has increased in nearly all metros over the past two decades and has accelerated in recent years.
Income Gap Widest in Fairfield County, San Francisco, and New York
The most unequal metro in America isn’t a well-known big city; it isn’t even bankrupt or overrun with rich tech workers. It’s Fairfield County, CT, home to the tony towns of Darien and Weston but also to the city of Bridgeport, where one third of children are below the official poverty level today and which tried to go bankrupt back in 1991. There, the 90th percentile of income is 18.5 times the 10th percentile. San Francisco, New York, Boston, and Detroit – which did successfully go bankrupt last year – round out the top five. Among the top 10 most unequal metros, four are in New England.
Where Income Inequality Is Highest
|#||U.S. Metro||90/10 ratio, 2012|
|1||Fairfield County, CT||
|2||San Francisco, CA||
|3||New York, NY-NJ||
|Note: the 90/10 ratio is the ratio of income at the 90th percentile to income at the 10th percentile, for a given metro. A higher ratio means greater income inequality. For the 90/10 ratio for the 100 largest metros, click here.|
Nationally, renting a 2-bedroom apartment is 35% cheaper than two 1-bedroom apartments. Even a 3-bedroom apartment is 12% cheaper than two 1-bedroom apartments. But the discount for shacking up is smallest in New York and Dallas.
It’s Valentine’s Day. Picture a romantic restaurant. Main course is finished. Lights are low. Your sweetheart leans over the table, and with a quiet voice, starts to speak. You prepare yourself for any possible conversation, playing each one out in your head. And then the question comes: “How much do you think we’ll save if we move in together?”
That might not be the romantic discussion you expected. But it’s an important one. Housing costs and economics affect whether people get roommates, live with their parents, or – yes – move in with their sweetheart. In general, living together saves money – but that depends on how many bedrooms you upgrade to and where you live.
To find out exactly what the cost tradeoffs are, we used rental listings on Trulia to calculate how much you’d save if you and your sweetheart traded in your separate 1-bedroom apartments and moved into a 2-bed or even a 3-bed unit. For this analysis, we did not simply compare median rents for 1-bed, 2-bed, and 3-bed apartments, because that would not be an apples-to-apples comparison: apartments with more bedrooms might be in different neighborhoods, have more amenities, or be in better-maintained buildings. Instead, we compared units in the same apartment building, calculating the average price difference by number of bedrooms for apartments within a building (see note below).
Love Can Save You 35% on Rent
Nationally, a 2-bedroom apartment rents for 30% more, on average, than a 1-bedroom in the same building. A bit of math reveals that trading in two 1-bedroom apartments for a 2-bedroom would save you 35% on rent. That makes sense: Renting a 2-bedroom should be less than renting two 1-bedrooms since the total number of bedrooms stays the same but you merge into one kitchen and maybe even one bathroom.
What’s more surprising is that you’d even save on housing costs by trading in two 1-bedroom apartments for a 3-bedroom. Nationally, a 3-bedroom apartment rents for 75% more, on average, than a 1-bedroom in the same building. That means if you traded in two 1-bedroom apartments for a 3-bedroom, you’d still save 12% on housing – and you and your sweetie would have a bedroom to share and a spare room each.0 comments
The typical middle-class household can afford more than 80% of the homes on the market across much of the Midwest but fewer than 30% in San Francisco, Orange County, Los Angeles, New York, and San Diego.
For the middle class today, homeownership is well within reach in some parts of the country, but in others, it’s more of a pipe dream than the American Dream. Even after taking income differences into account, homeownership affordability varies hugely across the country. Nationally, home prices still look a bit below their long-term average, and mortgage rates are far below their historical norms – which means that buying a home is still cheaper today than during the housing bubble. But this national average hides enormous differences in what the middle class can afford in each local market.
To assess middle-class affordability, we looked at all of the homes for sale across the U.S. through the eyes of the typical household in each metro area. For every for-sale home, we determined affordability based on whether the total monthly payment for that home was less than 31% of the metro’s median household income. (See note below.)
For instance, for a middle-class family in the Chicago metro area, where median household income is $58,911, homes under $254,000 are within reach based on the 31% guideline. Of homes listed for sale in Chicago, 73% are priced below that – which means that nearly three quarters of Chicago homes are “within reach” of the middle class. Remember: we’re defining the “middle class” separately for each metro based on the local median household income.0 comments