Soaring home values spurred growth in the million-dollar housing market
The number of ‘million-dollar cities’ experienced a boom in 2020 thanks to the pandemic-induced white-hot market.
Stats from Zillow show that there are now 312 US cities with a typical home value of at least $1 million – 45 more than a year ago and up 104 from the past five years. The one-year net gain is a 17% jump from 2019 and is also the biggest increase in the number of million-dollar cities in at least a decade, according to the analysis.
Zillow Senior Economist Chris Glynn said that the increase was mainly driven by the “incredible demand across all price tiers” that saw home values spike to new record highs in 2020.
“Despite the label, there are homes available in these communities for less than $1 million, but buyers must be realistic about their wish list and act quickly in the current market, especially since homes are selling in a matter of days in many places,” he said. “For sellers, it is possible to capitalize on the recent growth in these markets and relocate to far less-expensive markets – particularly with an increase in remote work offering flexibility in the job market.”
Around 70% of million-dollar cities are concentrated within nine coastal metro areas. Among those, 61 are in the San Francisco metro area, 51 are clustered around New York City, and 39 are in the Los Angeles area. San Jose (20 cities), Boston (11), Miami-Fort Lauderdale (11), Seattle (9), and Washington, DC (8) rounded up the list of metros that have multiple $1 million cities.
Atherton, Calif., a metro near San Francisco, has the highest typical home value in the country at approximately $6.6 million, Zillow revealed. Top two on the list is Hunts Point, Wash., near Seattle, with typical values around $6 million. Sagaponack, New York, and Jupiter Island, Fla. (Port St. Lucie metro area), followed with typical values over $5 million.
There are six additional cities with typical home values over $4 million, 21 more with values over $3 million, and another 38 with values over $2 million. If the current home value growth rates hold, two additional Coastal California cities (El Cerrito and Cayucos) could cross the $1 million threshold in the coming months.
“An increased demand in places like Potomac and other more expensive areas around the county is happening because of the pandemic-driven need for more indoor and outdoor space, home offices, pools and more,” said Samer Kuraishi, a Best of Zillow Premier agent and president of The ONE Street Company, a boutique real estate firm in Washington, D.C. ”We’re seeing more buyers from afar using technology to tour homes and buy ‘sight unseen.’ The sellers who have a great media package, including a floor plan with dimensions, virtual staging and 3D imaging, have the edge in such a competitive market.”