You might be surprised at how many million dollar homes there are these days, but it’s no real shock how it happened.
The most obvious answer is inflation, as homes that were worth $700,000 or $800,000 have inflated in value beyond the million-dollar threshold.
Houston-area real estate professional Kenya Burrell van Wormer points out the details, though: The cost of materials that go into a home, from concrete for foundations to sheetrock for walls, has been going up.
“It’s because of supply costs increasing. And when supply costs increase, those costs are passed on to the consumer.
“And also, the cost of simply living in a home is increasing, we’re talking about utilities to insurance, repairs, everything,” she says.
And while she agrees that inflation is a large consideration in the increase in million-dollar homes, there’s another reason too: The demand for more expensive, “higher-end” homes has been strong for a number of years.
Even during times when mortgages are harder to obtain and interest rates are higher than in many years, people who can afford to put a lot of money down or can pay cash for homes or are willing to pay for temporarily high mortgage rates have stayed in home markets, buying and selling.