Real Estate newsletter: The $1-million home is everywhere
Welcome back to the Real Estate newsletter, which this week will mostly be dedicated to recapping the deep dive from Andrew Khouri and myself into the once-unattainable million-dollar home.
For decades, popular perception of Southern California’s million-dollar homes was of estates in Beverly Hills or bungalows near the beach. Today, seven digits might not even get you two bathrooms.
In a historic market that surged during the pandemic, homes worth $1 million or more became the norm in once-affordable communities, and due to rising incomes and historically low borrowing costs, the number of people who can afford such a price skyrocketed. Today, L.A.’s typical $1-million home is a 1,500-square-foot abode with three bedrooms and two bathrooms. Not bad but not exactly luxury living.
In the city of L.A., 15 neighborhoods joined the million-dollar club during the pandemic, and most of them were clumped in three areas: northeast Los Angeles, South Los Angeles and the San Fernando Valley. Check to see whether yours made the list.
Looking to buy in that price range? Depending on where you look, $1 million can buy a 2,500-square-foot home with three bedrooms or a cozy two-bedroom that barely tops 800 square feet. The Times took a look at what $1 million buys in six L.A. neighborhoods. The stories are for subscribers only, but if you throw us a dollar — The Times is charging $1 for six months of digital access to the Los Angeles Times website — I promise you’ll find a million things to read.
August housing data dropped this week, and the numbers show a market that’s cooling from a hot, hot summer. The median sales price for the six counties of Southern California was $680,000, down 0.1% from July.
Huge news came down from Sacramento, as Gov. Gavin Newsom, fresh off winning the recall election, signed two zoning bills that aim to increase housing density and make it easier to build multiple units on single-family-zoned land.
On the celebrity side, one of the biggest home deals in Brentwood history went down when music mogul Scooter Braun shelled out $65 million for a striking minimalist farmhouse. He bought it from venture capitalist Larry Paul, whose family is the second-largest owner of the Pittsburgh Steelers.
While catching up on the latest, visit and like our Facebook page, where you can find real estate stories and updates throughout the week.
The modern million-dollar home
The pandemic economy pushed Southern California’s competitive housing market into such overdrive that a defining marker of wealth — the million-dollar home — has become the norm in a growing number of places.
Homes worth $1 million or more now dominate communities from Altadena at the foot of the San Gabriel Mountains to West Adams in South L.A. As bidding wars send prices even higher, more people are being priced out of communities where they grew up and homeownership is becoming more out of reach for low- and middle-income Californians.
At the same time, the proliferation of million-dollar homes shows that the price point is not a stretch for a growing share of Californians. It still requires financial strength to purchase such a home, but a surging stock market, rising incomes and historically low borrowing costs have made the $1-million house more common than ever.
L.A.’s new million-dollar neighborhoods
There have never been so many $1-million houses.
No longer limited to Santa Monica, the Hollywood Hills or the beach towns of Orange County, the $1-million house is popping up across Southern California, spurred by demand for bigger spaces during the pandemic and the resulting surge in home prices.
In the city of Los Angeles, the neighborhoods that crossed the $1-million threshold for the first time are largely in three areas: northeast Los Angeles, South Los Angeles and the San Fernando Valley. Here are L.A.'s 15 new million-dollar neighborhoods.
What does $1 million buy?
Over the course of the pandemic, 15 L.A. neighborhoods joined the million-dollar club, in which the typical home is valued at $1 million or more, based on a formula used by Zillow. Depending on where you’re looking, that sum can buy a four-bedroom spot with 3,000 square feet or a two-bedroom bungalow with only one bathroom.
SoCal’s crazy market cools in August
Southern California home prices were essentially flat in August from the previous month, as the market cools slightly from its torrid pace earlier this year, writes Andrew Khouri.
The six-county region’s median sales price — the point at which half the homes sold for more and half for less — was $680,000 last month, according to data released Monday by real estate firm DQNews. That’s a 0.1% slip from July.
Reflecting strong growth over the last year, the median was 13.9% above August 2020 levels. While sizable, that year-over-year gain was the smallest price rise since February.
Newsom signs significant housing bills
The first, Senate Bill 9, makes it possible to build more than one housing unit on land that was previously designated for only one unit. The second, SB 10, allows for denser development near public transit corridors, such as bus and train lines.
Here’s an explanation of the concepts and the new laws.
Music mogul buys the year’s priciest house
In Southern California’s priciest on-market sale so far this year, music mogul Scooter Braun has shelled out $65 million for a massive modern farmhouse in Brentwood. Records show it’s the most expensive deal in the neighborhood’s history.
Braun, a record executive who’s lately made headlines for his public feud with Taylor Swift, bought the brand-new home from Larry Paul, a venture capitalist whose family is the second-largest owner of the Pittsburgh Steelers.
Paul paid $11 million for the property in 2015 and razed the existing home, commissioning modern architect Noah Walker to create a 19,000-square-foot showplace on the nearly four-acre lot. Walker’s final product is a striking concoction of wood and stone that vaguely resembles a farmhouse with boxes stacked on top of one another.
What we’re reading
If you think the Southern California market is tough, check out this 10-foot-wide house in Boston that just sold for $1.25 million. Dubbed “The Skinny House,” the house was allegedly built by a soldier after returning from the Civil war, NPR reports.
The tiny house wave didn’t slow down during the pandemic, and USA Today reports that Google searches for “tiny house rentals” are up 113% over the last five years. They looked at a few picture-perfect units across the country.
The view from Sacramento
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