Hint: it’s every single affordable house on the market in Deltona, Fl, or half of all homes for sale in Akron, OH.
For the $238 million spent on the most expensive American home ever sold, approximately 1,100 affordable homes could have been purchased.
The record-breaking sale was made by the founder of a global investment firm in January of 2019. The home fills 24,000 square feet–the average New York City apartment in contrast, has just under 900 square feet.
For the purpose of this analysis, we define the typical affordable American home as being priced at $216,388. We made the determination based on the national median household income of $61,372, as reported by the U.S. Census Bureau in the 2017 American Community Survey. Using this number, we determined that the national median household can spend $1,034 a month on total housing payments. With a 20 percent down payment and 1.125 percent property tax rate, $216,388 is the highest home price a typical American can reasonably afford.
Dividing the $238 million spent on that one penthouse by $216,388, yields roughly 1,111 affordable homes.
To put that into context, that number is nearly equivalent to the total current inventory of affordable homes for sale in Deltona, FL, which counts 1,115 homes priced at or below $216,388. That represents just about 30 percent of all homes currently on the market in Deltona.
“Many Democratic presidential candidates want to do something to address housing affordability, but all of the solutions can seem like an exorbitant use of tax-payers’ money,” said Redfin chief economist Daryl Fairweather. “However, when you see that the most expensive home purchase costs as much as providing affordable housing to over a thousand families, the Democrats have a good case for some kind of redistribution of wealth to make housing more affordable.”
In fact, nearly every affordable home in the following metro areas could have been purchased for the price of the single $238 million home sale:
|Metro Area||Number of “affordable” homes for sale (priced $216,388 or less)||Percentage of homes for sale that are “affordable” (priced $216,388 or less)|
|North Port, FL||1,133||13.6%|
In Memphis, TN, $238 million translates into 46 percent of all homes for sale priced at $216,388 or less. That sum could have purchased nearly half of all Memphis homes.
Similarly, in Akron, OH, the value of the penthouse represents more than half of all homes for sale. With 1,085 homes listed meeting the criteria for affordable homes, there would still be a few hundred dollars left over.
When spent charitably, the $238 million’s impact could double. Bryan Thomas, the Director of Public and Media Relations for Habitat for Humanity International estimates that the cost to build a single home for a family in need to be around $100,000. “The costs of land and construction vary pretty greatly from community to community in the U.S,” he said. “However, it’s fair to ballpark that the average hard costs of construction of a Habitat home in the United States is about $100,000.”
As such, $238 million divided by $100,000 would yield approximately 2,380 new construction Habitat for Humanity homes.
Updated on July 17th, 2019