Here’s a video that explains why European inner cities have the most expensive homes, while American inner cities are full of slums.
Europe’s cities were built in the Middle Ages, before cars or railroads. Rich people paid for expensive homes in city centers so they could have the shortest walk to work. An urban home will naturally be limited in size, but prior to the Industrial Revolution, it didn’t make sense to have a massive house: It’s hard to keep a home warm and lit with candles and wood charcoal alone.
American cities were built in the 19th century, after the invention of railroads and coal energy. Rich people paid for big expensive estates along railroad lines because they could, and train tickets were so expensive that poor people could not afford to commute.
This configuration remained for centuries, reinforced by the fact that American inner cities have much higher crime rates than European ones.
Oh but hey America’s most expensive cities are turning inside out!
These days, the ability to commute to work is no longer reserved for the elite. In fact, long commutes are for suckers. Plus, it seems that having a gigantic house is overrated. Rich people are having fewer kids, and it doesn’t make sense to maintain a huge estate for two employed adults and a stay-at-home dog.
According to Bloomberg, Americans now want to live downtown. The zoning regulations of dense urban areas have made buildable lots incredibly expensive relative to the construction cost of a new home, thus urban developers focus on building high-end units to maximize their profits. If only rich people can afford to live in city centers, crime rates decrease, and this creates a virtuous cycle that makes Seattle look more and more like Paris.
There’s just one thing though. The opposite seems to be true in metros like Dallas, San Antonio, Phoenix, Atlanta, and pretty much everywhere that isn’t Seattle-San Francisco-New York. But other than those non-entities, wealthy Americans are unilaterally flocking downtown, I guess.