- theMReport.com - https://themreport.com -

$5M: Budget for Homebuyers Looking for Luxury Homes

House Price, Graph, Homes$5 million is the new $1 million when it comes to buying a luxury home according to data released by Trulia [1] on Wednesday. The report, which examined trends in luxury living found that in terms of all home values across 100 largest metros in the U.S., 4.3 percent homes are currently valued at $1 million or more.

The report indicated that in expensive cities like San Francisco listings priced at $5 million or more made up 3 percent of all listings. Long Island, New York, came in a close second with 2.2 percent listings priced at $5 million or more.

So why has $5 million become the new threshold for buying a luxury home? According to the report, the bar for owning a million-dollar home has dropped considerably over the years as these homes become more prevalent in the housing market.

Among the largest 100 metros surveyed for the report, homes valued at $1 million or more comprise 4.3 percent of all homes, a share that has gone up 3.8 times since 2002. For example, in San Francisco homes in the million-dollar plus range make up two-thirds of the housing market representing a share that has nearly tripled over the last five years. The share of these homes was 22.4 percent in 2012. In neighboring Oakland, California, the share of homes costing $1 million or more grew nearly five times from 5.1 percent in 2012 to 23.8 percent in 2017.

As a result of these rising prices, the report indicated, $5 million-plus homes are the new threshold for entry into luxury real estate. Over the past year, the share of $5 million plus homes increased 19.8 percent, or two percentage more than $1 million plus homes.

Despite the fact that the median home price of all listings in the last year was $282,900, 86 of the largest 100 metros had at least one listing priced at $5 million or more, the report said.

The view the complete report and methodology, click here [2].