In the 1800s, pioneers battled over nuggets of gold hidden in California’s hills and mountainsides. Now, Californians are battling over something just as valuable — homes. According to LendingTree’s latest market analysis, more than 10 percent of homes in San Jose, San Francisco, Los Angeles and San Diego are valued in excess of $1 million.
LendingTree Chief Economist Tendayi Kapfidze said the high concentration of $1 million homes in California is due to the number of startups and tech giants placing their stake in The Golden State, which drives up demand and prices.
“Our data shows that housing unicorns follow start-up unicorns, with the tech-unicorn haven of San Jose, California, leading the pack, with a jaw-dropping 53.81 percent of homes exceeding the million-dollar mark,” Kapfidze wrote. “In fact, it’s the only area where the median home value also exceeds $1 million ($1,069,000).”
“Its neighbor, San Francisco, also has strikingly high number (40.03 percent), and every other place in our rankings falls far behind the high concentration of million-dollar homes in these two Bay Area metros.”
More than 10 percent of the homes in Los Angeles (17.23 percent) and San Diego (10.55 percent) are valued at more than $1 million with respective median home values of $1,419,000 and $1,326,000.
On the other hand, The Rust Belt, which encompasses the Midwest and Great Lakes states, has the lowest share of $1 million homes. This area of the U.S. has grappled with manufacturers moving production to other states or overseas, causing home values to bottom out as demand dried up.
For example, in the bottom three markets (Buffalo, Pittsburgh, and Hartford) no more than 0.18 percent of homes are being valued at more than $1 million.
To determine the cities with the highest share of million-dollar homes, LendingTree looked at home value data in the 50 largest core-based statistical areas in the U.S. The analysis uses figures pulled on June 26, 2018 from the My LendingTree property value database. The database includes estimated home values for more than 155 million properties in the U.S., based on public tax, deed, mortgage and foreclosure data, as well as proprietary local data used to power home financing recommendations for My LendingTree users. LendingTree determined the concentration of million-dollar homes by dividing the number of homes in the area valued at $1 million or higher by the total number of homes in the CBSA.