The Millionaire’s Dilemma

Dina ElBoghdady takes a look for the Washington Post at the anguish of people trying to sell their $1 million + homes in the DC area:

When Natalie deWolf and her husband listed their District home for about $1.2 million in April, they were competing with roughly 25 similarly priced houses in their Chevy Chase neighborhood. [...] While entry-level homes are getting snapped up by bargain hunters across the Washington region, pricey ones are languishing. This excess supply is a setback for some pockets of this area where single-family homes listed for $1 million or more make up a sizable chunk of the offerings — about 85 percent in Cleveland Park, 73 percent in Great Falls and 55 percent in Potomac, according to research firm Delta Associates.

To me this is mostly a reminder that though the broader financial fallout from the home price collapse has certainly been a bad thing—just look at the unemployment rate—sky-high home prices are not a good in-and-of-themselves. The DC area, and many of America’s other largest metro areas, has for years been in a state where it’s extremely difficult for middle class families to afford to live in reasonable locations. Neighborhoods where a majority of the homes cost over $1 million are part and parcel of that situation. But while people who paid top-dollar for their homes certainly don’t want to lose money, at the end of the day more affordable housing is almost certainly a good thing.