There is no shortage of Bay Area housing anecdotes floating around. Whether it’s the tale of billboards that advertise new homes in San Francisco starting at “only” $1 million dollars, or a Google employee who must move into a 128-square-foot truck in the company’s parking lot to effectively save money, these unusual stories make it clear that the housing market in the Bay Area is bordering on insanity.
However, if you want more quantitative proof of the housing bubble that is plaguing the Bay Area, this map should do it. Using data from the real estate website Trulia, this animation plots the number of million dollar homes in the Bay Area.
In 2012, just under 20% of homes in San Francisco were worth over $1 million. Today, over 57% of homes have hit the mark, meaning that the majority of homes are now selling for over seven figures.
While San Francisco gets the majority of the attention for its housing prices, the situation is actually much wider in scope. San Jose and Oakland have seen the percentage of such houses increase to 46.3% and 19.7% respectively. Meanwhile, in Southern California, the number of $1 million houses have doubled in both San Diego and Los Angeles over the last four years.
Million Dollar Housing Markets in the U.S.
|City||$1MM homes (2012)||$1MM homes (2016)||Percentage point change|
|San Francisco, CA||19.6%||57.4%||+37.8%|
|San Jose, CA||17.4%||46.3%||+28.9%|
|Orange County, CA||7.1%||16.1%||+8.9%|
|Los Angeles, CA||8.0%||16.3%||+8.3%|
|San Diego, CA||5.4%||10.7%||+5.2%|
|New York, NY||7.0%||12.0%||+4.9%|
|Ventura County, CA||4.3%||9.0%||+4.6%|
Data courtesy of: Trulia
Looking at individual neighborhoods, the numbers get even more intense. In Westwood Park in San Francisco, for example, only 2.9% of homes were worth over a million dollars in 2012. Today, 96.0% of houses there hit the mark, leaving only a few pockets that have some element of affordability.
Just south of the San Francisco airport is the neighborhood of Nineteenth Avenue in San Mateo. There, not a single house can be found for under $1 million. This wasn’t the case in 2012, when only about 10% of houses were in seven digit territory.
Interested in buying in San Francisco yet?
Here’s a final comparison to show what you could own with a cool million:
All of the World’s Money and Markets in One Visualization
Our most famous visualization, updated for 2020 to show all global debt, wealth, money, and assets in one massive and mind-bending chart.
All of the World’s Money and Markets in One Visualization
In the current economic circumstances, there are some pretty large numbers being thrown around by both governments and the financial media.
The U.S. budget deficit this year, for example, is projected to hit $3.8 trillion, which would be more than double the previous record set during the financial crisis ($1.41 trillion in FY2009). Meanwhile, the Fed has announced “open-ended” asset-buying programs to support the economy, which will add even more to its current $7 trillion balance sheet.
Given the scale of these new numbers—how can we relate them back to the more conventional numbers and figures that we may be more familiar with?
Introducing the $100 Billion Square
In the above data visualization, we even the playing field by using a common denominator to put the world’s money and markets all on the same scale and canvas.
Each black square on the chart is worth $100 billion, and is not a number to be trifled with:
In fact, the entire annual GDP of Cuba could fit in one square ($97 billion), and the Greek economy would be roughly two squares ($203 billion).
Alternatively, if you’re contrasting this unit to numbers found within Corporate America, there are useful comparisons there as well. For example, the annual revenues of Wells Fargo ($103.9 billion) would just exceed one square, while Facebook’s would squeeze in with room to spare ($70.7 billion).
Billions, Trillions, or Quadrillions?
Here’s our full list, which sums up all of the world’s money and markets, from the smallest to the biggest, along with sources used:
|Category||Value ($ Billions, USD)||Source|
|Silver||$44||World Silver Survey 2019|
|Global Military Spending||$1,782||World Bank|
|U.S. Federal Deficit (FY 2020)||$3,800||U.S. CBO (Projected, as of April 2020)|
|Coins & Bank Notes||$6,662||BIS|
|Fed's Balance Sheet||$7,037||U.S. Federal Reserve|
|The World's Billionaires||$8,000||Forbes|
|Gold||$10,891||World Gold Council (2020)|
|The Fortune 500||$22,600||Fortune 500 (2019 list)|
|Stock Markets||$89,475||WFE (April 2020)|
|Narrow Money Supply||$35,183||CIA Factbook|
|Broad Money Supply||$95,698||CIA Factbook|
|Global Debt||$252,600||IIF Debt Monitor|
|Global Real Estate||$280,600||Savills Global Research (2018 est.)|
|Global Wealth||$360,603||Credit Suisse|
|Derivatives (Market Value)||$11,600||BIS (Dec 2019)|
|Derivatives (Notional Value)||$558,500||BIS (Dec 2019)|
|Derivatives (Notional Value - High end)||$1,000,000||Various sources (Unofficial)|
Derivatives top the list, estimated at $1 quadrillion or more in notional value according to a variety of unofficial sources.
However, it’s worth mentioning that because of their non-tangible nature, the value of financial derivatives are measured in two very different ways. Notional value represents the position or obligation of the contract (i.e. a call to buy 100 shares at the price of $50 per share), while gross market value measures the price of the derivative security itself (i.e. $1.00 per call option, multiplied by 100 shares).
It’s a subtle difference that manifests itself in a big way numerically.
Correction: Graphic updated to reflect the average value of an NBA team.
Charting the Rise and Fall of the Global Luxury Goods Market
This infographic charts the rise and fall of the $308 billion global personal luxury market, and explores what the coming year holds for its growth
The Rise and Fall of the Global Luxury Goods Market
Global demand for personal luxury goods has been steadily increasing for decades, resulting in an industry worth $308 billion in 2019.
However, the insatiable desire for consumers to own nice things was suddenly interrupted by the coming of COVID-19, and experts are predicting a brutal contraction of up to one-third of the current luxury good market size this year.
Will the industry bounce back? Or will it return as something noticeably different?
A Once Promising Trajectory
The global luxury goods market—which includes beauty, apparel, and accessories—has compounded at a 6% pace since the 1990s.
Recent years of growth in the personal luxury goods market can be mostly attributed to Chinese consumers. This geographic market accounted for 90% of total sales growth in 2019, followed by the Europe and the Americas.
Analysts suggest that China’s younger luxury goods consumers in particular have significant spending power, with an average spend of $6,000 (¥41,000) per person in pre-COVID times.
An Industry Now in Distress
The lethal combination of reduced foot traffic and decreased consumer spending in the first quarter of 2020 has brought the retail industry to its knees.
In fact, more than 80% of fashion and luxury players will experience financial distress as a result of extended store closures.
With iconic luxury retailers such as Neiman Marcus filing for bankruptcy, the pressure on the luxury industry is clear. It should be noted however, that companies who were experiencing distress before the COVID-19 outbreak will be the hardest hit.
Predicting the Collapse
In a recent report, Bain & Company estimated a 25% to 30% global luxury market contraction for the first quarter of 2020 based on several economic variables. They have also modeled three scenarios to predict the performance for the remainder of 2020.
- Optimistic scenario: A limited market contraction of 15% to 18%, assuming increased consumer demand for the second and third quarter of the year, roughly equating to a sales decline of $46 billion to $56 billion.
- Intermediate scenario: A moderate market contraction of between 22% and 25%, or $68 to $77 billion.
- Worst-case scenario: A steep contraction of between 30% and 35%, equating to $92 billion to $108 billion. This assumes a longer period of sales decline.
Although there are signs of recovery in China, the industry is not expected to fully return to 2019 levels until 2022 at the earliest. By that stage, the industry could have transformed entirely.
Changing Consumer Mindsets
Since the beginning of the pandemic, one-quarter of consumers have delayed purchasing luxury items. In fact, a portion of those who have delayed purchasing luxury goods are now considering entirely new avenues, such as seeking out cheaper alternatives.
However, most people surveyed claim that they will postpone buying luxury items until they can get a better deal on price.
This frugal mindset could spark an interesting behavioral shift, and set the stage for a new category to emerge from the ashes—the second-hand luxury market.
Numerous sources claim that pre-owned luxury could in fact overtake the traditional luxury market, and the pandemic economy could very well be a tipping point.
The Future of Luxury
Medium-term market growth could be driven by a number of factors, from a global growing middle class and their demand for luxury products, as well as retailers’ sudden shift to e-commerce.
While analysts can only rely on predictions to determine the future of personal luxury, it is clear that the industry is at a crossroads.
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