T
he harsh reality of California's real estate market is on full display in Orange County, where a $1 million home purchase has raised eyebrows. Rhiannon Do, the 22-year-old daughter of Supervisor Andrew Do, bought a three-bedroom, two-bath house in unincorporated Tustin last summer for $1.035 million.

    The price tag may seem staggering, but it's not unusual in Southern California. According to Lexi Newman, a realtor with Compass, the median sale price in greater Los Angeles is over $1 million, while in Orange County it's around $1.2 million. In Tustin, homes are selling for an average of $1.4 million.

    Newman attributes the high prices to the pandemic-driven surge in demand and historically low interest rates. "Prices really skyrocketed during the pandemic very quickly," she said. Even at a listed price of $1 million, sale prices often exceed that amount, with buyers frequently paying upwards of $1.2 or $1.3 million.

    So what does $1 million buy you in SoCal? The answer varies depending on the neighborhood, but even at this price point, homes are often small and may require repairs. Newman notes that the lack of housing inventory has contributed to high prices, and she doesn't expect a change anytime soon.

    One potential factor that could give buyers more buying power is if interest rates continue to drop. "The more that rates come down, the more your money stretches," Newman said. However, even with lower interest rates, home prices in many parts of SoCal are likely to remain north of $1 million.

    To put this into perspective, a recent trip to Michigan showed Newman just how different the market is elsewhere. A 10,000-square-foot mansion in Detroit sold for a relatively modest $1.3 million – a far cry from what $1 million can buy in Southern California.