Pandemic Year Brought Incredible Surge in 'Million-Dollar Cities'

Rhea-AI Summary

The Zillow analysis reports a significant rise in U.S. million-dollar cities, with 45 new additions in the past year, marking the largest annual increase in over a decade. Currently, there are 312 cities with typical home values exceeding $1 million, an increase of 104 from five years ago. This surge reflects a 7.5% annual appreciation in home values, driven by heightened demand during the pandemic. Coastal metro areas dominate the list, with San Francisco leading at 61 cities. High-value markets like Atherton, Calif. ($6.6 million) and Hunts Point, Wash. ($6 million) top the rankings.

Positive

• Increased number of million-dollar cities up by 45 in one year.
• 312 cities now have typical home values over $1 million, a 104 increase over five years.
• Home values increased by 7.5% annually, indicating strong market demand.

Negative

• None.

SEATTLE, Jan. 11, 2021 /PRNewswire/ -- Although the typical value of a home in the United States is about $263,000, the number of "million-dollar cities" spiked sharply last year,  according to a new Zillow analysis.  There are 45 more U.S. cities¹ with a typical home value of at least $1 million than there were a year ago -- the largest increase in at least a decade.

There are now 312 million-dollar cities, up 104 from five years ago. Nearly half of those 104 crossed that threshold in 2020, a reflection of the flaming hot market last year that saw home values appreciating near 7.5% annually in November as demographic trends and pandemic effects brought surging demand through most of 2020.  This follows a year in which home prices appreciated at the lowest rate since 2013 and a net of two cities fell below the $1 million threshold.

Million-dollar cities are fairly congregated geographically, with 70 percent 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. The metro areas of San Jose (20 cities), Boston (11),  Miami-Fort Lauderdale (11), Seattle (9) and Washington, D.C., (8) also have multiple cities where the typical home price exceeds $1 million.

"In 2020 home values soared nationwide because of incredible demand across all price tiers, which we expect to continue well into 2021," says Zillow senior economist Chris Glynn. "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.  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."

Atherton, Calif., near San Francisco, has the highest typical home value in the country at about $6.6 million. Hunts Point, Wash., near Seattle, is No. 2,  with typical values around $6 million. Sagaponack, New York, and Jupiter Island, Fla. (Port St. Lucie metro area), follow 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.

Historically, the list of million-dollar cities is dominated by areas that offer natural amenities like proximity to the ocean and mountains, and many of the cities that joined the list this year fit that mold. Some newcomers include Potomac, Maryland; Longport, Long Beach Township, and Allenhurst in New Jersey; and Westhampton and the Town of Shelter Island in New York. Calistoga and Yountville in California's Napa Valley also crossed the $1 million threshold in 2020, as well as Incline Village, Nevada, in the Lake Tahoe area.

"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."

If current rates of appreciation hold, two additional Coastal California cities could join the $1 million club in the coming months — El Cerrito and Cayucos.

Metros with the Most $1 Million Cities (November 2020)
Metro	Number of $1 Million Cities
San Francisco, Calif.	61
New York, N.Y.	51
Los Angeles, Calif.	39
San Jose, Calif.	20
Boston, Mass.	11
Miami, Fla.	11
Seattle, Wash.	9
Washington-Arlington-Alexandria	8
Santa Rosa, Calif.	7
Santa Maria-Santa Barbara, Calif.	6
Salinas, Calif.	5
San Diego, Calif.	5
Growth of $1 Million Cities
Year	Number of Net New $1 Million Cities
2016	8
2017	27
2018	26
2019	-2
2020	45

About Zillow

Zillow Group, Inc. (NASDAQ: Z and ZG) is reimagining real estate to make it easier to unlock life's next chapter.

As the most-visited real estate website in the U.S., Zillow® and its affiliates offer customers an on-demand experience for selling, buying, renting or financing with transparency and nearly seamless end-to-end service. Zillow Offers® buys and sells homes directly in dozens of markets across the country, allowing sellers control over their timeline. Zillow Home Loans™, our affiliate lender, provides our customers with an easy option to get pre-approved and secure financing for their next home purchase. Zillow recently launched Zillow Homes, Inc., a licensed brokerage entity, to streamline Zillow Offers transactions. 

Zillow Group's affiliates and subsidiaries include Zillow®, Zillow Offers®, Zillow Premier Agent®, Zillow Home Loans™, Zillow Closing Services™, Zillow Homes, Inc., Trulia®, Out East®, StreetEasy® and HotPads®. Zillow Home Loans, LLC is an Equal Housing Lender, NMLS #10287 (www.nmlsconsumeraccess.org).  

¹ As of November 2020

 

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SOURCE Zillow

FAQ

What does Zillow's report reveal about million-dollar cities in 2020?

Zillow's report indicates a surge of 45 new million-dollar cities in 2020, totaling 312 nationwide.

How many million-dollar cities are in San Francisco according to Zillow?

San Francisco has 61 million-dollar cities, the highest concentration in the U.S.

What was the annual appreciation rate of home values in 2020 according to Zillow?

Home values appreciated by 7.5% annually in 2020 as reported by Zillow.

What are the typical home values for the top million-dollar cities?

The highest typical home value is in Atherton, Calif. at about $6.6 million.

When did Zillow report the surge in million-dollar cities?

Zillow reported the surge in million-dollar cities in a press release dated January 11, 2021.