In the 92107 zip that I track closely, the 1.2m+ range was slow 2012-2015 even as the mid to low end of that market was very hot. In mid-2016, the high end joined the rest of the market and you started seeing lots of sales in that range, and average time to sell $1.2m houses go pretty suddenly from ~6 months to 1.5-2 months.
June 30 saw two different $2.5m sales in one day, one a tear-down and new construction, the other one a 1912 7,000 sf mansion that had been on and off the market for years.
As for inflation, I disagree that it is higher than what the government reports. People have a cognitive bias where they remember prices that are going up better than prices going down. A number of private efforts to measure US inflation all come very close to the official US Gov number, which itself is one of several measures that are all pretty close to each other (CPI-U, GDP deflater, etc).[/quote]
You could be right regarding high-end properties. My only evidence is based on looking at Redfin. I live in Bay Ho, and there are not many houses for sale (all under 1million). When I scroll across to La Jolla there seem to be lots and lots of houses for sale (all above 1 million).
I always judge inflation studies with a little suspicion after reading “The 2 income trap”. I guess Warren convinced me that ‘necessities’ have outstripped the published inflation rate: such as utilities, housing, education, healthcare and childcare. Whereas ‘wants’ such as cars, fast food, restaurants, and consumer goods have all been in deflation.
