Across the United States, more than 800 neighborhoods have a median home value that exceeds $1 million, according to a report by Trulia. This new data means that the number of US homes costing $1 million or more has doubled since 2012.
While the million dollar home trend is more common in coastal cities, the phenomenon has been creeping inland. Since 2018, more than 100 neighborhoods bridged the million-dollar landmark. And cities like Indianapolis, Austin, and Newport gained their first million dollar neighborhoods.
In the Austin suburb of Barton Creek, the median home value crossed the $1 million mark four years ago. According to Cheryl Young, senior economist at Trulia, Barton Creek is a gated neighborhood of luxury real estate. There is also a nearby nature reserve.
Of course, that means Austin joins the ranks of San Jose and San Francisco. Those two cities have long been home to streets lined with million dollar homes. In the metro San Francisco area, 81% of homes cost at least $1 million dollars, according to Trulia’s report.
That impressive percentage is number two on Trulia’s ranking of 100 US metro areas with million dollar homes. San Jose topped the list with a 14% year-over-year increase in million dollar homes.
While more million dollar neighborhoods than ever have been popping up across the country, they largely remain an anomaly. Trulia found that “only” 4% of all homes in the United States are worth $1 million.
A city like San Francisco has such a high percentage because of the high number of wealthy tech professionals. But it’s also because of its much smaller size and population than other expensive cities. This combination of factors impacts other cities on Trulia’s list as well, such as Seattle which holds the ninth spot in percentage of homes that are worth at least $1 million, despite it being only the 18th largest city in the country.
The increasing number of million dollar homes is pointing towards a higher cost of living in metro areas across the country, as the price of available real estate dictates the rest of a city’s economy. For instance, in places like San Francisco and New York City, the income required to live comfortably today easily breaks six figures.
For many average Americans who make salaries well under those figures, such as a security guard who makes an average of nearly $40,000 a year, this puts a “comfortable” life in a major city out of their financial reach and may force them to relocate to more affordable locales.
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Personally, I would rather have a $300K house and $700K in the bank and not have to work the rest of my life!
I can’t imagine what property taxes and insurance are for a $1 million house.
Local economic conditions have driven expensive housing so, while most of today’s plush metropolitan housing is on the nouveau rich coasts, it’s not exactly true that this phenomenon is “moving” inland.
Wealth generated during the rise of America’s golden age of the automobile has long spawned expensive manors In Detroit’ s suburbs of Bloomfield Hills, Gross Pointe and St. Claire Shores.
Chicago’s North Shore is another case in point.
Saying that housing is moving to where it’s always been reminds me of a tour I took on the Acoma Mesa Pueblo in New Mexico, some years ago. The native guide offered an aboriginal version of American “history”.
He said: “your history books say Columbus discovered America. But America wasn’t lost – we knew where it was all the time.”
Great article. Many of the houses that are valued at $1 million plus would be half that price in most other cities. Do you think there will be a correction soon?
If you look at the high-end markets, especially, then the price corrections are already underway. This will certainly cascade down to the mid-range and low-end markets in short order.
The average Sydney Australia house price is more than $1 million. This doesn’t make us richer, just more people in debt.
It’s a little crazy here down under.
Do you think that part of the “million dollar” home thing has anything to do with inflation of the cost of building materials? To buy a lot, put in utilities like septic system, electric, gas, maybe a bit of solar and then pay the recently inflated prices for building materials, you don’t get all that much house for a million bucks in a nice neighborhood in Northern NJ. Around here you get more bang for your buck buying an already built “million dollar” house and spending a bit tweaking it to suit yourself.