Supply Imbalances Trigger Ever Higher Prices

This article first appeared in the PB August 2003 issue of Pro Builder.

Fast-growing, land-constrained regions dominate the ranks of states with the most million-dollar homes, telling a story of supply imbalances in many parts of the country. Three-quarters of the million-dollar homes are in just 10 states, and California is the poster child, with 41% of the U.S. total.

Bob Rivinius, CEO of the California Building Industry Association, says the state needs a million new homes to meet pent-up demand. Then it needs 230,000 new homes and apartments annually to keep pace. He says high fees, lack of insurance for multifamily construction, local growth controls and lawsuits by anti-growth groups will limit the number of new units built in California this year to a record 186,000.

Million-Dollar Single-Family Homes by State
	Owner-occupied single-family homes	Homes valued at $1 million-plus	% of total U.S. million-dollar homes
1. California	5,527,618	128,619	41.0%
2. New York	2,689,728	22,327	7.1%
3. Florida	3,242,202	18,094	5.8%
4. Connecticut	728,244	13,906	4.4%
5. Illinois	2,470,338	12,386	3.9%
Total Top Five	14,658,130	195,332	62.2%
6. New Jersey	1,701,732	11,869	3.8%
7. Texas	3,849,585	10,137	3.2%
8. Massachusetts	1,187,871	10,090	3.2%
9. Washington	1,157,462	7,384	2.4%
10. Michigan	2,269,175	5,989	1.9%
Total Top 10	24,823,955	240,801	76.7%
Total U.S.	55,212,108	313,759	100.0%
Source: NAHB, 2003. Analysis of 2000 Census Bureau data does not include condominiums or co-ops.