The nine-figure club is a special club, and that club is also now looking to own nine-figure real estate,” said listing agent Ryan Serhant. “It’s a new paradigm now. The uber-wealthy are looking for places to diversify assets, and real estate has become one of the most popular and sought after mega-assets. The levels have exploded (emphasis added).
Your father was right about a few things, and one of them is the timeless value of real estate.
For starters, the utility of houses as pure investments has never been more obvious. U.S. home values have risen 36% since 2020—an increase twice as large as any other two-year leap on record. At $440,000, the median house is now worth more than half the cost of an average retirement. Time your downsizing right and security in old age is half won (emphasis added).
- The United States government could start taxing the "uber-wealthy," and use the funding thus made available to stimulate the production of housing that would be sold or rented to persons with average and below average incomes. The purchase or rental prices would be set at a level that could be afforded by people with those average and below average incomes (your typical teacher, store clerk, police officer, house painter, college student, etc.), and if you bought a home at such an affordable purchase price, you would have to sell it, when or if you did, at a price that someone with an average or below average income could afford.
- City and County governments could increase the percentage of "inclusionary housing" required by anyone who built housing within the jurisdiction. Inclusionary housing would be sold or rented, as just described above, to persons with average or below average incomes, and if an inclusionary housing unit were sold, it would have to be sold at a price that someone with an average or below average income could afford. City Council Member Justin Cummings, now running for the Third District County Supervisor seat I once held, was successful in getting the City Council to up the City's inclusionary percentage from 15% to 20%. That is a definite step in the right direction - and Cummings has said he's going to try to get the Board of Supervisors to do the same thing! Still, that means that 80% of all new housing is going to be "investment grade," and prices will keep going up, driven by the private market.
- More radically, governments at all levels could spend their money as described below, to make affordable housing increasingly available, and to keep affordable housing permanently affordable. Both the United States Government and the State of California could rearrange their priorities to make a lot of money available, if they wanted to, that would be used to purchase housing in communities, like Santa Cruz, where there is a clear affordability problem (LOTS of communities in California would qualify). The housing then purchased would be resold to local working families at an "affordable price," but with a deed restriction that would insure that any future resale of that property would be at a price that a person with an average or below average income, who worked in that community, could afford. The effect of this would be to remove housing from the private (investment) market.