According to housing data from Redfin, million-dollar homes are occupying 8.6 percent of listings in U.S. markets. Yahoo Finance Reporter Rebecca Chen breaks down how median home prices are rising in regional housing markets, such as San Francisco, and the affordability of single-family housing needs in these cities.
AKIKO SHAUNA: The share of million-dollar homes is up across the country. And it's leaving homebuyers with very few options as prices near all-time highs. Here to explain is Yahoo Finance's Rebecca Chen. Rebecca, we're talking about million-dollar listings here. It is scary how desensitized you get, right? When you are in a market like LA, California, or broadly New York, I mean, $1 million feels like the starting point right now.
REBECCA CHEN: That's right, Akiko. So what we're seeing from Redfin is that right now in America, about 8.6% of all homes are over $1 million. And that is already an increase from just a couple months ago in February when that percentage was just 7.3%.
And in fact, like you said, in California, two cities, San Francisco and San Jose, actually have more million-dollar homes or homes above $1 million than less than $1 million. In fact, in San Jose, we saw that the median price home is sitting at $1.8 million right now. And San Francisco, even though it's a little bit less, but still the median price home is sitting at $1.34 million.
And we also dig a little bit into some housing transactions in the past six months. And we saw that in San Francisco, in the last six months, there were nearly 900 units of homes that sold above $1 million. And these are homes that are-- there are even homes that are selling into the eight figures. But as for homes that are under $1 million, only 100 of them were at that price.
AKIKO SHAUNA: So, Rebecca--
REBECCA CHEN: And so some of the experts we talked to actually said that in these expensive cities, the million-dollar homes is not really a symbol of luxury but really a necessity.
AKIKO SHAUNA: So, Rebecca, where does that leave potential home buyers there? Because it doesn't sound like they have a lot of options with over 8% of homes selling for over $1 million on the market for over $1 million.
REBECCA CHEN: That's right. So we actually-- another thing that we looked into was we were looking at the active Redfin listings. We pulled up a city. So we looked at San Diego. And we really saw that in San Diego, the buyer is not having much choices, very, very limited inventory at a reasonable price.
So when we filter a Redfin listing for homes under $1 million, we saw that less than half of the listings were at that criteria. And in fact, if you are a new home buyer and you're looking for that starter home, a single-family, three-bedroom under $3 million, there were only about 60 units in the city of San Diego with those criteria.
So what it's really saying is that there are really limited choices for people out there. So we're definitely seeing that in these cities, buyers are not having many options. Right now it seems like million-dollar home is a middle-class resident property for the city.
AKIKO SHAUNA: Yeah, you know there's an affordability problem when you're talking about a starter home or a fixer upper above $1 million. Rebecca Chen, thanks so much for that.