Pity the millionaire: Mansions in short supply
As the US housing market rebounds and confidence builds, $1 million-plus homes are now scarce.
According to CNBC, the U.S. is suffering from a mansion shortage. Housing inventory in the 90 wealthiest ZIP codes in the U.S. has fallen by 15% over the past year, according to a study CNBC cites from Atlas Research. Available homes selling for $1 million-plus have plunged by 70% in Palm Beach, Fla., and supplies are tight in Old Greenwich, Conn.
As tough as it is for the wealthy, this is good news for the overall economy. The National Association of Home Builders estimates that building an average new single-family home generates 3.05 jobs and $89,216 in taxes. Bigger homes, of course, have bigger economic footprints, as does remodeling. Applications for building permits hit a five-year high in April.
The surging U.S. real estate market is attracting investors from around the world. Americans are in a mood to buy as well, thanks to a higher stock market this year and rising consumer confidence. Housing prices soared by almost 11% year over year in March, the largest such monthly gain since 2008.
Some observers, however, are already worried that housing is in a bubble that's bound to burst.
"If prices keep going up at this rate for another six months, we will have a bubble, and people will get hurt," Dean Baker, a co-director of the Center for Economic and Policy Research in Washington, D.C., said in an interview with Bloomberg News.
People who now have to wait to find the home of their dreams should be thankful they don't have more serious problems.
Follow Jonathan Berr on Twitter @jdberr.
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