A pair of new data reports is offering new insight on the current state of housing-fueled prosperity.
A study released by Zillow
has found nearly one in 20 residential ZIP codes can be defined as a “$1 million neighborhood,” which means at least 10 percent of the homes in those communities are worth seven-digit figures. Since 2014, 346 new $1 million neighborhoods have emerged, making a new total of 1,280 very-housing-rich communities.
However, the wealth is not being shared equally: nearly 74 percent of all ZIP codes in the San Francisco metropolitan area meet the seven-digit benchmark, while there no new million-dollar communities have sprung up in St. Louis over the last decade. Las Vegas only gained one $1 million neighborhood since 2014.
"As home values reach new peaks, $1 million homes are increasingly common, even in neighborhoods once considered middle class," said Zillow's Chief Economist Svenja Gudell. "The U.S. median home value is just over $200,000, but in San Francisco, Los Angeles and other expensive cities, homes are worth much more. As home values hit seven figures in many neighborhoods, it's going to have real impacts on affordability for middle-class homeowners whose incomes haven't kept up, and this imbalance especially has implications for people on fixed incomes whose property taxes are rising along with their home value."
Separately, ATTOM Data Solutions
issued a report stating that more than 14 million residential properties in the second quarter qualified as equity rich—where the combined loan amount secured by the property was 50 percent or less of the estimated market value of the property—up by nearly 320,000 properties from the previous quarter and up by more than 1.6 million properties from a year ago. This represents 24.6 percent of all mortgaged residences, up from 24.3 percent in the previous quarter and up from 22.1 percent one year earlier.
On the flip side, more than 5.4 million properties were still seriously underwater—where the combined loan amount secured by the property was at least 25 percent higher than the property’s estimated market value—down by more than 64,000 properties from the previous quarter and down by more than 1.2 million from a year ago. These struggling properties represented 9.5 percent of all mortgaged residences, down from 9.7 percent in the previous quarter and down from 11.9 percent one year earlier
“An increasing number of U.S. homeowners are amassing impressive stockpiles of home equity wealth, enjoying the benefits of rapidly rising home prices while staying conservative when it comes to cashing out on their equity—homeowners are staying in their homes nearly twice as long before selling as they were prior to the Great Recession, and the volume of home equity lines of credit are running about one-third of the level they were at during the last housing boom,” said Daren Blomquist, senior vice president at ATTOM Data Solutions. “However, this home equity wealth is unevenly distributed across different geographies, value ranges, occupancy statuses and lengths of ownership, with a disproportionately high equity rich share among high-end properties, investor-owned properties and properties owned for more than 20 years.”