Coincidentally, it’s also home to some of the wealthiest Americans, according to Capgemini’s new U.S. Wealth Report for the year 2015.
When it comes to housing the nation’s millionaires, the unaffordable San Francisco area ranks No. 5 on the wealth report, outranked only by New York, Los Angeles, Chicago and the nation’s Capitol.
What Capgemini found seems like a fun survey if you’re the type of person shopping for a wealthy friend to buy you a Bentley. But if affordable housing is your goal, there is a strange corollary between what cities are considered costly and which real estate markets house the nation’s wealthy.
As Capgemini notes, high-net worth individuals—classified as citizens with investable assets valued up to $1 million—most often reside in the same 12 U.S. cities. In fact, two-thirds of these individuals live in the following cities: New York (No. 1 on the list); Los Angeles (No. 2); Chicago (No. 3); Washington, D.C., (No. 4); San Francisco (No. 5); Boston (No. 6); Houston (No. 7); Philadelphia (No. 8); San Jose (No. 9); Dallas (No. 10); Detroit (No. 11); and Seattle (No. 12).
With the exception of Houston, Dallas and Detroit, most of the cities on the list remain unaffordable from the perspective of working-class and middle-class Americans.
For instance, Zillow places New York’s median home value at nearly $600,000, while Los Angeles residents are dealing with a median home price of roughly $554,000. Only Houston and the Dallas-Fort Worth offer affordability across differing income levels with the median prices in those cities hovering around $141,300, and $174,400, respectively, according to Zillow data.
And it seems high-net worth individuals may continue to influence these top real estate markets with their net wealth soaring even higher in 2015. Capgemini noted that the nation now has 4.4 million individuals classified as having a high net worth.
In fact, the percentage of those reaching this economic status increased 8.6% between 2013 and 2014, the report says.
As these "high-financial status individuals" dominate different real estate markets and prices rise, it’s hard to argue against their growing influence.
Click here to view the full report.