I heard a feature on the radio this morning that mentioned that Austin had the highest percentage of million-dollar homes in Texas. It could be worse (or better), of course. San Jose, CA has a median home price of over a million. This may explain how I know people who have lived in the same apartment there for 25 years. The article was about the whole US, and according to research by LendingTree, the most cities with a high percentage of homes over a million dollars are in states along the coasts. Denver and Phoenix are exceptions.
I got a chuckle out of the article in some ways. It was sort of like a “don’t move here if you want affordable housing” list. It was also a “Sue Ann will avoid these crowded cities” list, but that’s just me. Basically, in much of the US, a house doesn’t have to be a mansion to be “worth” a million dollars anymore. Wow.
One way this applies to us is that it’s another sign that prices are going up, up, up and will have to eventually go down, especially around here. Right after this feature on the radio, by the way, as a report that consumer spending has increased by some hopeful percent in the past month, even though incomes have not risen to match the spending. More consumer debt sounds like a recipe for more people having poor credit ratings and having trouble buying a starter home (I’m not really worried about those million-dollar people).
For people who are in the redevelopment business there are a few more implications I can think of:
- There’s someone out there who will buy your high-end renovation, if that’s your thing.
- There’s also a huge under-served population of people looking for affordable housing that’s not scary and dangerous.
- All those people with poor credit may mean opportunities to renovate then owner finance, for passive income, if that’s in your business model.
- People will also continue to look for houses to rent.
Opportunities are always out there. Do you have any other thoughts on this proliferation of high-end housing in this area or where you live? We’d love to hear your thoughts. I’m hoping Lee will have some thoughts and write up another blog post.