More and more homes in the United States are worth $1 million – or much more.
A new analysis from Zillow reveals 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 and San Francisco metropolitan areas lead the pack with the most cities with homes worth at least $1 million. There are 76 luxurious towns and villages in each of these areas that qualify. Cities in the greater New York 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 list of “million dollar cities” is based on the company’s own estimates for home values. It’s 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 given time.
A whopping 44% of all cities on this year’s list are located in California. Newcomers to the list this year include Hill Country Village, Texas; Lake La Belle, Wis.; Ridge Butte, Colorado; and Mission Viejo, California.
“The surge in demand for housing last year sent home values skyrocketing, even in places where prices were already very high,” Jeff Tucker, Zillow’s chief economist, said in a statement.
This surge in demand is largely due to the coronavirus pandemic, which has ushered in a new era of rock-bottom mortgage rates and driven millions of Americans to work from home. This in turn led to renewed interest in real estate and a shortage of available homes, which further stimulated demand and pushed up prices. The typical mortgage payment just hit a record high of $1,454, a jump of $350 from a year ago.
In 2021, the year when the price of the typical house jumped by almost 20%, 146 new cities crossed the million dollar threshold. The states of Idaho, Montana and Tennessee saw cities make the list for the first time — a sign, says Tucker, that “the geography of wealth in the United States has begun to change.”
Zillow predicts that 49 more cities will be added to the list by the middle of the year if current home appreciation rates remain stable.
Where the million dollar houses are everywhere
Here are the top 10 metropolitan areas with the most million cities in December, according to data from Zillow:
- New York, New York: 76
- San Francisco, CA: 76
- Los Angeles, CA: 57
- San Jose, CA: 22
- Boston, Massachusetts: 18
- Seattle, Washington: 16
- Miami, Florida: 14
- Washington, D.C.: 11
- Santa Maria-Santa Barbara, CA: 9
- Santa Rosa, CA: 9
If you were hoping for the hot real estate market to start cooling off this winter, you’ll probably be disappointed. Homes sold at their fastest pace on record for January this year, with the typical home lasting just 61 days on the market.
No wonder 70% of Americans think now is a bad time to buy a home. With mortgage rates now at their highest level since May 2019, it’s a safe bet that many homebuyers will be rushing to lock in mortgages before rates rise even further.
“Even expensive homes move quickly in this market,” Erik Throm, an agent for Fast Real Estate in San Francisco, said in a statement.
Throm recommends that potential buyers be prepared with a pre-qualification letter when researching and suggests that they use a local agent who understands the ins and outs of their desired neighborhoods.
More money :
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Housing market madness continues as buyers snap up homes at record pace
Most Americans think now is not the time to buy a home (and they’re probably right)