The Land of Million Dollar Homes

Living in Southern California is both a real estate blessing and a curse. If you bought a home here more than a couple of years ago, you're living the high life as you've watched prices soar and equity rise. If you're looking for a home in Southern California that you can afford, good luck. Million dollar homes are now becoming the standard in California:

Million-dollar homes were once a sign of real affluence. Now, at least in California, they are getting to be a dime a dozen.

Nearly 49,000 homes in the state sold for at least $1 million last year — a 47% increase from 2004, according to data released Tuesday by DataQuick Information Systems, a La Jolla-based real estate research firm.
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"A million dollars isn't what it used to be," said James Joseph, owner of Century 21 Grisham-Joseph brokerage in Whittier.

Indeed, if you sold a home in California last year, there was a 1 in 13 chance that it went for at least $1 million, according to DataQuick.

Your chances in 2004: 1 in 20.

The total of homes fetching $1 million or more last year was nearly four times the number in 2002, according to DataQuick.

Only a few years ago, $1 million bought you an "estate" property, one with ample square footage on a large lot in an exclusive neighborhood.

Not anymore. The median-sized million-dollar home last year was 2,480 square feet with four bedrooms and three bathrooms, DataQuick found.

I'm not quite there yet, but a 2,300 square foot townhome similar to mine was just listed for $699,000. God bless 'em, I hope they get it because my $197,000 purchase price in 1990 is looking better all the time.

Orange County is in a very good position when it comes to real estate. Our weather ranges from "good" to "outstanding", there are good schools and jobs here, and there's never a shortage of people wanting to move here. There is very little land left for new development, so even if the real estate market nationwide dropped considerably, the impact here would be minimal because demand would still significantly outstrip supply.

Whenever I travel out of state I always look at the local real estate market. While in Rockport, TX recently I visited a new home development where you could buy a 2,400 square foot ranch style house brand new for $200,000. I'll take three.

Of course the downside of all this is what will happen in a few years when my kids want to move out and find a home of their own. Good luck. I'm not sure where we'll be in 15 years, but if the equity holds up, we'd be crazy to stay here and just sit on it. Like many other Californians, we may one day wave bye-bye to the Golden State and take the equity and go someplace else, buy something for cash, and bank the rest.

By that time, maybe we'll have joined the million dollar club. I hope so.