But three more cities join the million-dollar club
Home value growth in million-dollar cities has slowed down despite the addition of three more metros with average home values of $1 million or more, according to a recent Zillow analysis.
Last year, seven cities, including Santa Ynez, Calif., Telluride, Colo., Forest Hills, Tenn., Sierra Madre, Calif., Mclean, VA., Moose, Wyo., and Redondo Beach, Calif. became $1 million cities. Despite the increase, the number of million-dollar cities reached their lowest levels at 218 cities.
For the first time since 2016, cities fell off the million-dollar list (San Jose, Calif., San Quentin, Calif., Lexington Hills, Calif., and Laie, Hawaii) as home values dropped in some expensive areas after a period of sharp price growth.
"Odd though it may seem, it's the cities at the top that are 'struggling' the most during this return to normalcy in the market," said Skylar Olsen, Zillow's director of economic research. "More than just slower growth, home values good and truly fell in many of these hubs of luxury, a sign that the excessive home value appreciation of the past several years drove prices too high -- even beyond the reach of those who could afford almost anything almost anywhere else."
An average of just under 20 cities per year broke the $1 million threshold from 2014 to 2018, and a record high of 25 cities in 2017 when home values were appreciating almost 7% annually.
The San Francisco, New York, and Los Angeles metro areas topped the list. Over half of all $1 million cities were in these three metros, with 46 in San Francisco, 43 in New York, and 30 in Los Angeles.
Meanwhile, five cities will lose their $1 million status this year, according to Zillow. Kailua, Hawaii, Milpitas, Calif., Harding Township, N.J., Daly City, Calif., and Fremont, Calif., will fall off the list if the downturn in appreciation rates continue.