One of the recurring refrains about the New Normal housing market is that just because median and/or average home prices have failed to match the astronomic increases in prices seen in the 2004-2007 period, that it the current bubble is far less concerning. And to an extent that is true: the reason why asking rents have been soaring in recent years is because for most of the US middle class, owning a home is now impossible, so the only option is rent.
And yet, someone keeps buying houses, especially the most expensive houses, those which cost $1 million and over: as we will show momentarily, the bubble there is all too visible.
As Trulia's Ralph McLaughlin writes, while the total share of million dollar homes in the United States has increased from 1.6% to 3% over the past 4 years, many metro areas and neighborhoods have seen a far greater increase.
He adds that while the million-dollar home used to be a rarity in the United States, they have now become commonplace in several of America’s largest housing markets. Among the 100 largest metros, San Francisco has seen the largest increase in the share of million dollar homes in the country, growing to 57.4% in 2016 from 19.6% of homes in 2012. It’s followed by two other Bay Area metros, No. 2 San Jose and No. 3 Oakland. But the phenomenon is not limited to the SF Bay Area: metros in Southern California, Hawaii, and the Northeast have also seen noticeable gains, having nearly doubled the share of million dollar homes in just four years.
It's not just a question of price: the image below shows the vast disparity what one can purchase for a million dollars in Louisville, KY vs San Francisco, CA.
But while America's million dollar home infestation, in large part driven by both the second tech bubble, by Wall Street wholesale buyers and offshore all-cash "investors" seeking to park untaxed, illicit cash, has been duly covered on this website for years, Trulia has managed to capture this relentless bubble of million dollar homes quite vividly with these stunning animations showing the proliferation of $1+ million homes across the key housing markets.
And so, without further ado, here is the animated number of million dollar homes over the past four years in...
SF Bay Area:
And last but certainly not least, New York City and especially Brooklyn
Curiously, New York actually saw the smallest relative increase in million dollar homes, moving to 12 % of homes from 7%. But that relatively small increase was heavily concentrated in Brooklyn. Of the five neighborhoods that witnessed that great increase, all five are in Brooklyn. Bedford Stuyvesant increased the most, moving from just under 2% of homes valued at least a million dollars to 56.5%.