Orange County has entered the trillion-dollar housing pantheon.
The OC’s collective home value jumped by $121 billion in a year to $1.11 trillion as of June 30, surpassing the trillion mark, the Orange County Register reported, citing figures from Redfin. It’s now the fifth-most valuable market in the nation.
Boosted by skyrocketing home prices in key markets, the number of cities and districts claiming membership in the trillion-dollar housing club have doubled in the past year.
Orange County, Chicago, Phoenix, and Washington, D.C. now join Los Angeles, New York, Atlanta and Boston for the distinction.
A new Redfin report crunched home value estimates for more than 95 million U.S. residential properties in June. It found the total value of homes across the nation jumped by $3.1 trillion in 12 months to a record $49.6 trillion.
“The value of America’s housing market will likely cross the $50 trillion threshold in the next 12 months as there are not enough homes being listed to push prices down,” Redfin economist Chen Zhao said in a statement.
When supply doesn’t keep up with demand, prices rise. That’s the tale of the U.S. housing market as consumers grapple with one of the most unaffordable home price run-ups in a generation, according to the Register.
Home prices surged during the pandemic as families and remote workers bought bigger homes paid for by cheap borrowing costs. Then the Federal Reserve hiked interest rates to curb inflation, sending mortgage rates through the roof — and significantly adding to monthly mortgage costs.
Home values in some cities are growing more quickly than others, Redfin’s report found.
In OC, the $121 billion surge equals a 12 percent one-year jump in value. Among the 95 major U.S. markets studied, that was the third-largest percentage gain — with the added value nearly equaling the combined worth of all homes in either New Orleans or Rochester, N.Y.
Of the remaining trillion-dollar cities, New York was No. 1 at $2.5 trillion, up 8 percent in a year; followed by Los Angeles at $2.2 trillion, up 6 percent; Boston at $1.3 trillion, up 7 percent; Atlanta at $1.3 trillion, up 5 percent; Chicago at $1.08 trillion, up 9 percent; Washington, D.C. at $1.05 trillion, up 7 percent; and Phoenix at $1 trillion, up 6 percent, according to Redfin.
Five cities or regions are fast approaching the 1 trillion mark, including San Diego (now $987 billion), Oakland ($917 billion), San Jose ($867 billion), the Inland Empire ($798 billion) and San Francisco (($703) billion.
Only one metropolitan area saw its home values fall: Cape Coral, Florida, where the value of its housing market fell 1.6 percent over the last year.
Mortgage rates have fallen in recent weeks ahead of a likely interest rate cut by the Federal Reserve next month, which could push down home borrowing costs further — and boost home prices more, according to Zhao, the economist from Redfin.
“Mortgage rates have started falling, but many potential sellers and buyers are waiting to make a move, meaning we are likely to continue seeing a pattern where prices slowly tick up,” she said. “That’s great news for the millions of American homeowners who see their equity rising, but first-time buyers are going to keep finding it tough to find an affordable home.”
— Dana Bartholomew
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