Elon Musk's New Home Is In The 7th Priciest Housing Market In The Country

This article was originally published on Aug. 23, 2022.

New data analysis from First American Financial Corp FAF shows the $4.5 million home that Tesla Inc TSLA CEO Elon Musk, Neuralink executive Shivon Zillis, and their twins share (at least part-time) in upscale Westlake, Texas — a suburb of Austin — is overvalued.

What Happened: Information from First American Data & Analytics shared by First American’s chief economist Tuesday highlights the difference between median home sale price, and median home buying power from June.

The analysis shows that, if housing is valued fairly, purchasing power should be equal to or greater than the median sale price of a property. The difference between homebuyers' purchasing power and the median transaction price nationwide in June was the smallest it has been since 2007.

Also read: The U.S. City With The Highest Rent Growth May Surprise You. Hint: NYC and LA Don't Crack The Top 5

The top 10 overvalued markets are in the following cities:

• 10. Las Vegas, Nevada
• 9. New York City, New York
• 8. Riverside, California
• 7. Austin, Texas
• 6. Sacramento, California
• 5. Seattle, Washington
• 4. San Diego, California
• 3. Los Angeles, California
• 2. San Francisco, California
• 1. San Jose, California

Of the 50 markets analyzed by First American, 15 were deemed overvalued by its metric on a market-by-market basis.

The San Jose region was the most expensive, with a typical sale price of $1.5 million and a house-buying power of just under $770,000 in June. Detroit, Michigan, is ranked as having the most undervalued housing market.

Why It Matters: As purchasers get used to the new reality of increased mortgage rates, the home market has subsided from its pandemic-era frenzy. The increase in home prices is changing to reflect the decline in demand. For instance, the annual house price increase in San Jose peaked at 19.5% in February 2022 but slowed to 8.7% by June 2022.

Also read: The Company That Built Elon Musk's Tiny Home Has Now Raised Over $74 Million From Retail Investors

Existing-home sales in June fell to their lowest level since February 2019, excluding the spring of 2020, when the housing market briefly stopped. The fall is not a crash, but rather an adjustment, according to First American.

While economic uncertainty and mortgage rate volatility are getting worse for prospective home buyers, there is still a strong desire to own a home, particularly among millennials.

Musk's Other Home: When it comes to Musk and his other real estate properties, a rumor that he was living in a $50,000 house made by Boxabl popped up last year after he sent a tweet mentioning the price of his home. Boxabl founder Galiano Tiramani shared the details exclusively with Benzinga.

Photo: Created with images from Steve Jurvetson on flickr