For those with millions to spend on a house, California might just be the perfect place to settle down.
In fact, five of the most expensive real estate markets in the country are all located in California. The high real estate prices have come in part from tech companies that have flocked to California in order to set up shop. To give some perspective, the average price for a home in the United States is roughly $200,000. The average listing price for the first city on this list comes in at a staggering $1,309,599.
Advertisement
5 Most Expensive Cities to Own a Home
5. San Francisco, California
The average listing price for a home in San Francisco is $ 1,309,599.
4. Los Gatos, California
The average listing price for a home in Los Gatos is $ 1,360,497.
3. Saratoga, California
The average listing price for a home in Saratoga is $1,684,261.
2. Newport Beach, California
The average listing price for a home in Newport Beach is $ 1,773,824.
1. Malibu, California
The average listing price for a home in Malibu is $ 2,155,900.
As an aside, it’s worth noting that all of these cities share one important thing in common. Between 78 and 83% of the home buying populace that lives in these cities have white collar jobs. Perhaps this should be taken as a life lesson. If one wants to own a million dollar home, then one might want to consider pursuing a white collar career.
If you’re interested in buying a home in any of these cities, then you’ll almost certainly need a jumbo loan. The conforming loan limit for cities like San Francisco is around $625,000. If you can find a home for less than this price, then a conventional loan will work just fine. But if the value of the house is above $635,000, then a jumbo loan will be required.
The good news is that jumbo loans have been easier to get as of late than they have been in years past. As home prices have stabilized somewhat over the past several months, these types of loans have become more accessible. But that doesn’t necessarily mean that getting one of these luxury homes is going to be easy even if you have a very lucrative career. Lenders typically want the home buyer to put down 20% of the value of the cost of the loan.
Wells Fargo and Bank of America have lowered that threshold somewhat and are accepting jumbo loans with only 15% down. However, 15% down on a million dollar home is still a ton of money at $150,000. Of course, not everyone who buys a house in California is necessarily interested in living in it themselves. Owning property in one of these cities could be very profitable if home prices keep going up. The problem is that home prices are tied to many different variables which can often be very difficult to predict. It’s possible, though arguably not very plausible, that another housing bubble will pop and send prices south once more.
