Number of Million Dollar Homes?

[KamFongasChinHo]

Why do you NEED to buy something in your price range of $1 million to $1.5 million? Why don’t you buy the house you want and then worry about price later? Is there a need to own a “million dollar” home that if depreciation continues may not be a million dollars when you sell (or gasp! foreclose)? Seriously, wouldn’t it be better to have more money to spend on things like cars, vacations, computers, education, etc. rather than tying so much money in a house? Why do Californians pay $1 million for a 3,000 sq foot house when in most other parts of the country that house would be $500k?

[KamFongasChinHo]

Why do you NEED to buy something in your price range of $1 million to $1.5 million? Why don’t you buy the house you want and then worry about price later? Is there a need to own a “million dollar” home that if depreciation continues may not be a million dollars when you sell (or gasp! foreclose)? Seriously, wouldn’t it be better to have more money to spend on things like cars, vacations, computers, education, etc. rather than tying so much money in a house? Why do Californians pay $1 million for a 3,000 sq foot house when in most other parts of the country that house would be $500k?

[KamFongasChinHo]

Why do you NEED to buy something in your price range of $1 million to $1.5 million? Why don’t you buy the house you want and then worry about price later? Is there a need to own a “million dollar” home that if depreciation continues may not be a million dollars when you sell (or gasp! foreclose)? Seriously, wouldn’t it be better to have more money to spend on things like cars, vacations, computers, education, etc. rather than tying so much money in a house? Why do Californians pay $1 million for a 3,000 sq foot house when in most other parts of the country that house would be $500k?

[KamFongasChinHo]

Why do you NEED to buy something in your price range of $1 million to $1.5 million? Why don’t you buy the house you want and then worry about price later? Is there a need to own a “million dollar” home that if depreciation continues may not be a million dollars when you sell (or gasp! foreclose)? Seriously, wouldn’t it be better to have more money to spend on things like cars, vacations, computers, education, etc. rather than tying so much money in a house? Why do Californians pay $1 million for a 3,000 sq foot house when in most other parts of the country that house would be $500k?

[KamFongasChinHo]

Why do you NEED to buy something in your price range of $1 million to $1.5 million? Why don’t you buy the house you want and then worry about price later? Is there a need to own a “million dollar” home that if depreciation continues may not be a million dollars when you sell (or gasp! foreclose)? Seriously, wouldn’t it be better to have more money to spend on things like cars, vacations, computers, education, etc. rather than tying so much money in a house? Why do Californians pay $1 million for a 3,000 sq foot house when in most other parts of the country that house would be $500k?

[KamFongasChinHo]

Why do you NEED to buy something in your price range of $1 million to $1.5 million? Why don’t you buy the house you want and then worry about price later? Is there a need to own a “million dollar” home that if depreciation continues may not be a million dollars when you sell (or gasp! foreclose)? Seriously, wouldn’t it be better to have more money to spend on things like cars, vacations, computers, education, etc. rather than tying so much money in a house? Why do Californians pay $1 million for a 3,000 sq foot house when in most other parts of the country that house would be $500k?

[Anonymous]

Richard:

I’ve had the exact same question myself – how many people out there can really afford these homes?

I think to answer your question fairly you have to consider not just CV but basically the number of high-earners or wealthy in the greater SD area. Not all wealthy folks are going to move to CV. There are plenty of other enclaves – even Poway has its share of expensive homes, and frankly they are a lot nicer for the money than a tract home in CV that has 2 feet between the neighbors.

Look here for a start
http://factfinder.census.gov/

They estimate that ~54,625 households in SD county have incomes > $200k (about 5%; there are about 1,000,000 households). It’s a lot harder to estimate how many people like this are shopping for homes at present. Let’s assume that shopper demographics are the same as the county, so about 5% of shoppers have incomes > $200k. Let’s also assume that 5-8% of all homes turn over in a given year (according to NAR at least – let’s use 6.5%) Then you have about 65,000*(homeownership rate of 61% for SD) = 40,000 households looking to buy/sell for whatever reason, and it is likely about 5% of these have incomes > $200,000, so about 2,000 buyers.

Anyone want to estimate the number of homes for sale county-wide in this buyer range?

Note that traditionally $200k is enough to buy a $600k home, not a $1M home.

[Anonymous]

Richard:

I’ve had the exact same question myself – how many people out there can really afford these homes?

I think to answer your question fairly you have to consider not just CV but basically the number of high-earners or wealthy in the greater SD area. Not all wealthy folks are going to move to CV. There are plenty of other enclaves – even Poway has its share of expensive homes, and frankly they are a lot nicer for the money than a tract home in CV that has 2 feet between the neighbors.

Look here for a start
http://factfinder.census.gov/

They estimate that ~54,625 households in SD county have incomes > $200k (about 5%; there are about 1,000,000 households). It’s a lot harder to estimate how many people like this are shopping for homes at present. Let’s assume that shopper demographics are the same as the county, so about 5% of shoppers have incomes > $200k. Let’s also assume that 5-8% of all homes turn over in a given year (according to NAR at least – let’s use 6.5%) Then you have about 65,000*(homeownership rate of 61% for SD) = 40,000 households looking to buy/sell for whatever reason, and it is likely about 5% of these have incomes > $200,000, so about 2,000 buyers.

Anyone want to estimate the number of homes for sale county-wide in this buyer range?

Note that traditionally $200k is enough to buy a $600k home, not a $1M home.

[Anonymous]

Richard:

I’ve had the exact same question myself – how many people out there can really afford these homes?

I think to answer your question fairly you have to consider not just CV but basically the number of high-earners or wealthy in the greater SD area. Not all wealthy folks are going to move to CV. There are plenty of other enclaves – even Poway has its share of expensive homes, and frankly they are a lot nicer for the money than a tract home in CV that has 2 feet between the neighbors.

Look here for a start
http://factfinder.census.gov/

They estimate that ~54,625 households in SD county have incomes > $200k (about 5%; there are about 1,000,000 households). It’s a lot harder to estimate how many people like this are shopping for homes at present. Let’s assume that shopper demographics are the same as the county, so about 5% of shoppers have incomes > $200k. Let’s also assume that 5-8% of all homes turn over in a given year (according to NAR at least – let’s use 6.5%) Then you have about 65,000*(homeownership rate of 61% for SD) = 40,000 households looking to buy/sell for whatever reason, and it is likely about 5% of these have incomes > $200,000, so about 2,000 buyers.

Anyone want to estimate the number of homes for sale county-wide in this buyer range?

Note that traditionally $200k is enough to buy a $600k home, not a $1M home.

[Anonymous]

Richard:

I’ve had the exact same question myself – how many people out there can really afford these homes?

I think to answer your question fairly you have to consider not just CV but basically the number of high-earners or wealthy in the greater SD area. Not all wealthy folks are going to move to CV. There are plenty of other enclaves – even Poway has its share of expensive homes, and frankly they are a lot nicer for the money than a tract home in CV that has 2 feet between the neighbors.

Look here for a start
http://factfinder.census.gov/

They estimate that ~54,625 households in SD county have incomes > $200k (about 5%; there are about 1,000,000 households). It’s a lot harder to estimate how many people like this are shopping for homes at present. Let’s assume that shopper demographics are the same as the county, so about 5% of shoppers have incomes > $200k. Let’s also assume that 5-8% of all homes turn over in a given year (according to NAR at least – let’s use 6.5%) Then you have about 65,000*(homeownership rate of 61% for SD) = 40,000 households looking to buy/sell for whatever reason, and it is likely about 5% of these have incomes > $200,000, so about 2,000 buyers.

Anyone want to estimate the number of homes for sale county-wide in this buyer range?

Note that traditionally $200k is enough to buy a $600k home, not a $1M home.

[Anonymous]

Richard:

I’ve had the exact same question myself – how many people out there can really afford these homes?

I think to answer your question fairly you have to consider not just CV but basically the number of high-earners or wealthy in the greater SD area. Not all wealthy folks are going to move to CV. There are plenty of other enclaves – even Poway has its share of expensive homes, and frankly they are a lot nicer for the money than a tract home in CV that has 2 feet between the neighbors.

Look here for a start
http://factfinder.census.gov/

They estimate that ~54,625 households in SD county have incomes > $200k (about 5%; there are about 1,000,000 households). It’s a lot harder to estimate how many people like this are shopping for homes at present. Let’s assume that shopper demographics are the same as the county, so about 5% of shoppers have incomes > $200k. Let’s also assume that 5-8% of all homes turn over in a given year (according to NAR at least – let’s use 6.5%) Then you have about 65,000*(homeownership rate of 61% for SD) = 40,000 households looking to buy/sell for whatever reason, and it is likely about 5% of these have incomes > $200,000, so about 2,000 buyers.

Anyone want to estimate the number of homes for sale county-wide in this buyer range?

Note that traditionally $200k is enough to buy a $600k home, not a $1M home.

[cowboy]

I have also wondered who buys these $1M+ homes. I have always wondered how people deal with these extraordinary house payments (PITI) for so long as well. Let’s say typically for 30 years. Especially in the job market these days. There is no such thing as a secure job these days. So a household has to drop $4K+/month for a average tract home for 30 years. To me it seems hard to convince myself I can keep up these extraordinary payments for the next 30 years even if today I can. Then I ask myself why I would want to put myself through such anyway. Is that average tract home in CV really worth practically every dime I may make for the next 30 years?

I guess for me it seems to be a quality of life thing. The house owns me; not me owning the house.

[cowboy]

I have also wondered who buys these $1M+ homes. I have always wondered how people deal with these extraordinary house payments (PITI) for so long as well. Let’s say typically for 30 years. Especially in the job market these days. There is no such thing as a secure job these days. So a household has to drop $4K+/month for a average tract home for 30 years. To me it seems hard to convince myself I can keep up these extraordinary payments for the next 30 years even if today I can. Then I ask myself why I would want to put myself through such anyway. Is that average tract home in CV really worth practically every dime I may make for the next 30 years?

I guess for me it seems to be a quality of life thing. The house owns me; not me owning the house.

[cowboy]

I have also wondered who buys these $1M+ homes. I have always wondered how people deal with these extraordinary house payments (PITI) for so long as well. Let’s say typically for 30 years. Especially in the job market these days. There is no such thing as a secure job these days. So a household has to drop $4K+/month for a average tract home for 30 years. To me it seems hard to convince myself I can keep up these extraordinary payments for the next 30 years even if today I can. Then I ask myself why I would want to put myself through such anyway. Is that average tract home in CV really worth practically every dime I may make for the next 30 years?

I guess for me it seems to be a quality of life thing. The house owns me; not me owning the house.

[cowboy]

I have also wondered who buys these $1M+ homes. I have always wondered how people deal with these extraordinary house payments (PITI) for so long as well. Let’s say typically for 30 years. Especially in the job market these days. There is no such thing as a secure job these days. So a household has to drop $4K+/month for a average tract home for 30 years. To me it seems hard to convince myself I can keep up these extraordinary payments for the next 30 years even if today I can. Then I ask myself why I would want to put myself through such anyway. Is that average tract home in CV really worth practically every dime I may make for the next 30 years?

I guess for me it seems to be a quality of life thing. The house owns me; not me owning the house.

[Author]

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