Across the United States, over 800 neighborhoods have a median home value that exceeds $1 million, according to a recent report released by Trulia. This new data means that the number of homes costing $1 million or more in the country has doubled since 2012.
While the million dollar home trend has been more common than not in coastal cities, the data Trulia gathered shows that the phenomenon has been creeping inland more and more. Just in the last year, over 100 neighborhoods bridged the million-dollar landmark and cities like Indianapolis, Austin, and Newport gained their first million dollar neighborhoods.
In one suburb southwest of Austin, known as Barton Creek, the median home value increased by 9% in just one year to cross that $1 million mark. According to Cheryl Young, senior economist at Trulia, Barton Creek is a neighborhood built for luxury real estate, with a gated perimeter, nearby nature reserve, and plenty of new homes to choose from. This last feature is especially appealing, as 48% of homebuyers look for homes that have never been lived in before, according to Zillow.
With this major shift in real estate, Austin joins the ranks of San Jose and San Francisco, cities that 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 is a 13.7% increase in the number of million dollar homes since October of last year.
That impressive percentage comes in at just number two on Trulia’s ranking of how quickly 100 US metro areas are adding million dollar homes. San Jose, San Francisco’s Bay Area neighbor, topped the list with a 14% year-over-year increase in million dollar homes.
While million dollar neighborhoods seem to be popping up across the country, they largely remain an anomaly. Trulia found that only 3.6% of all homes in the United States are worth $1 million.
A city like San Francisco has such a startlingly high percentage because of the number of wealthy professionals in the tech field moving in and because it has a 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 9th 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 Seattle a resident would need to make approximately $89,248 per year to live comfortably. In San Francisco, that number breaks six figures at $123,268 and New York City comes in just below, at $99,667.
For many average Americans who make salaries well under those figures, such as a security guard who makes an average of nearly $30,000 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.