The Typical Home Is Now Worth Over $1 Million in Nearly 500 U.S. Cities
More and more homes around the U.S. are worth $1 million — or well over.
A new analysis from Zillow finds that there are now 481 cities where the typical home is valued at $1 million or more. There were 285 locations on Zillow's list of "million-dollar cities" in 2019.
The New York City and San Francisco metro areas lead the pack with the most cities where homes are worth at least $1 million. There are 76 ritzy cities and towns in each of these areas that qualify. The towns in the greater New York City area where homes are typically valued at $1 million or more include Sagaponack, New York, and Alpine, New Jersey.
Instead of using sales price data, Zillow's "million-dollar cities" list is based on the company's own estimates for home values. They're an extension of Zillow "Zestimates" — which real estate experts say can be "really hit or miss" in terms of assessing a home's true value at any moment.
A whopping 44% of all the cities on this year's list are located in California. Newcomers to the list this year include Hill Country Village, Texas; Lac La Belle, Wisconsin; Crested Butte, Colorado; and Mission Viejo, California.
"The surge in demand for housing last year sent home values skyrocketing, even in places where prices already were sky-high,” Jeff Tucker, Zillow senior economist, said in a statement.
That demand surge comes largely thanks to the coronavirus pandemic, which ushered in a new era of rock-bottom mortgage rates and resulted in millions of Americans working from home. That in turn led to renewed interest in real estate and a shortage of available homes, which boosted demand even further and sent prices soaring. The typical mortgage payment just hit a record high of $1,454, a $350 jump from last year.
In 2021, a year when the price of the typical home surged nearly 20%, 146 new cities crossed the $1 million threshold. The states of Idaho, Montana and Tennessee saw cities make the list for the first time — a sign, Tucker says, that “the geography of wealth in the U.S. has begun to shift.”
Zillow predicts that another 49 cities will be added to the list by the middle of the year if current rates of home appreciation remain steady.
Where $1 million homes are everywhere
Here are the top 10 metro areas with the most $1 million cities as of December, according to Zillow data:
- New York, New York: 76
- San Francisco, California: 76
- Los Angeles, California: 57
- San Jose, California: 22
- Boston, Massachusetts: 18
- Seattle, Washington: 16
- Miami, Florida: 14
- Washington, D.C.: 11
- Santa Maria-Santa Barbara, California: 9
- Santa Rosa, California: 9
If you were hoping for the red-hot housing market to start cooling down this winter, you’ll probably be disappointed. Homes sold at their fastest pace ever for the month of January this year, with the typical house lasting just 61 days on the market.
No wonder 70% of Americans believe that now is a bad time to buy a home. With mortgage rates now at their highest level since May 2019, it’s a fair bet that lots of homebuyers will be rushing to lock in mortgages before rates rise even further.
"Even expensive homes are moving quickly in this market,” Erik Throm, an agent with Fast Real Estate in San Francisco, said in a statement.
Throm recommends that potential homebuyers be prepared with a pre-qualification letter during their search and suggests they use a local agent who understands the ins and outs of their desired neighborhoods.
More from Money:
Rich Out-of-Town Buyers Are Making It Hard for Locals to Afford Homes in Their Own Cities
Housing Market Madness Continues as Buyers Snatch up Homes at Record-Fast Pace
Most of America Thinks It's a Bad Time to Buy a House (and They're Probably Right)