Want to live in sunny California? You probably need at least a million dollars

Maybe it’s time to stop dreaming of California, because the most expensive major metropolitan areas are “seeing seasonal price appreciation ramp up faster than anywhere else,” Zillow’s chief economist, Skylar Olsen, wrote in a new report.

Monthly home price increases were the most substantial in “coastal California metros” and Seattle. In San Jose, home values jumped 3.3% from February to March; in San Francisco, they rose 2.7%; in Seattle, 2.4%; in San Diego, 2.1%; and finally, in Los Angeles, home values rose 2% last month.

San Francisco, San Jose, and San Diego all have an average home value above a million dollars. Seattle’s average home value is almost $880,000, and Los Angeles’s is roughly $974,000.

“It’s not a coincidence that these five metros are also where the highest share of homeowners are likely locked into their mortgage rate,” Olsen wrote, referring to an earlier analysis from this week that found “much of the monthly increase occurred in markets which have a disproportionately higher number of homeowners that aren’t hamstrung by mortgage rate lock-in.”

Meaning, homeowners (largely baby boomers and their predecessors) who were mortgage-free were more likely to sell their homes than those with low mortgage rates. In four cities in California—Los Angeles, San Diego, San Francisco, and San Jose—only 3% of homeowner populations didn’t have to worry about mortgage rates. And as Zillow’s chief economist pointed out, it’s not a coincidence that these four cities saw substantial increases in their home values, and happen to have homeowner populations that are largely affected by changes in interest rates. “All of these metros have seen below-average recovery in inventory compared to pre-pandemic,” Olsen wrote. But of course, even prior to the pandemic, they had less inventory.

California doesn’t have enough homes; it’s been a problem in the state for decades. Everybody knows it exists, but years of policy failure, unhindered local control, and homeowners who don’t want anything to change in their neighborhoods have made it almost impossible to build more homes. When mortgage rates suddenly surged after dropping to historic lows, homeowners who locked in a low mortgage rate refused to sell their homes. Even now, mortgage rates have come down from their recent peak at 8.03%, but they’re still high. The current 30-year fixed mortgage rate is 7.30%, as of the latest reading.

That only tightened existing supply (it’s largely why we saw existing home sales fall to their lowest point in almost 30 years) and drove up prices in these already unaffordable metropolitan areas. Just consider this: “Appreciation is subdued in Southern metros where existing inventory has grown or nearly recovered since the outset of the pandemic—and has been helped along by robust injections of new construction,” Olsen wrote.

In other metropolitan areas, such as New Orleans, San Antonio, Tampa, Orlando, and Jacksonville, home price appreciation was the slowest because of rising inventory and new construction. Clearly, as urban economists and housing analysts have long argued, building homes brings prices down, or at least keeps them where they are.

“New construction is providing a pressure-relief valve in these metros, giving move-up buyers a place to go,” Olsen wrote, later adding, “Recovering inventory in these areas has helped ease competition and bring price appreciation under control.”

And it’s not just monthly appreciation. Some of the highest annual price increases occurred in San Diego, San Jose, and Los Angeles. On the other hand, in New Orleans and San Antonio, home prices are down from a year earlier. Not to mention, price cuts were fairly common in San Antonio, Orlando, and Jacksonville—whereas in San Francisco, San Jose, and Los Angeles it was pretty common for homes to be sold over asking.

This story was originally featured on Fortune.com