Last year saw a record 146 American cities become new “million dollar cities” where the typical home is valued at at least $1 million, according to a new analysis from Zillow released Wednesday.
The increase, the most in a single year, brought the total number of million dollar cities to 481, including a number of off-the-beaten-path locales including in states like Idaho and Montana, according to the Zillow data. If current trends continue, 49 more housing markets are expected to earn the designation by mid-2022.
“The surge in demand for housing last year sent home values skyrocketing, even in places where prices already were sky-high, and that helped tip a record number of cities into the million-dollar club,” Zillow Senior Economist Jeff Tucker said. “The locations of these newly seven-figure towns bust the myth that everyone fled California and the Northeast last year, as California, Massachusetts, and New York led the pack for the most new cities with home values above $1 million.”
Most million-dollar cities are clumped within three Metropolitan areas: San Francisco and New York boast 76 while Los Angeles has 57, and San Jose includes 22. Sixty percent of all the cities lie within just eight metropolitan areas and 44 percent are in California, according to the Zillow data.
San Jose is followed by Boston, Seattle, Miami, Washington D.C., Santa Maria-Santa Barbara, and Santa Rosa, California, for metros with the most “million dollar cities.”
But 2021 saw those kind of cities branch out as workers and retirees set course for new enclaves, with towns in Tennessee, Idaho, and Montana earning the designation for the first time.
“We’re seeing how the geography of wealth in the U.S. has begun to shift, as 2021 was the first year for both Idaho and Montana to place any cities on this list, and now those Western states boast three million-dollar cities each,” Tucker said.
Indian Creek, Florida, a 300 acre island in the Biscayne Bay with a typical home value at approximately 28.3 million, known as the “billionaire’s bunker,” clocked in as the most expensive city in the country. The island is home to an exclusive cadre of less than 100 celebrities and notables including Tom Brady, investor Carl Icahn, and former U.S. Airlines CEO Rakesh Gangwal.
Atherton, California, a small town in the Bay Area where the typical home is valued at $7.7 million, was named second most expensive city in the country. NBA star Steph Curry owns a home that abuts Whatsapp founder Liu Qiangdong’s property in Atherton.
Hunts Point, Washington; Jupiter Island, Florida; and Sagaponack, New York rounded out the top five most expensive locales in the country, based on Zillow’s data.
The huge spike in home valuations has been driven in part by a lack of inventory of homes on the market, and the possibility of relocation for white-collar workers. The increase in home values has inspired countless homeowners to cash in on their home value by selling their home earlier than they may have originally planned to.
“With such sharp increases in home prices over the last year, we’re seeing tons of demand come from current homeowners who’ve decided to tap into their home equity to move up into their dream home,” Erik Throm, an agent with Fast Real Estate in San Francisco, said in a statement.
The intense competition for homes on the market makes it essential for buyers to be prepared, Throm said.
“Even expensive homes are moving quickly in this market, and shoppers should be prepared with a pre-qualification letter and the help of a trusted local agent who knows the pros and cons of their specific neighborhood and how to structure a winning bid that still protects a buyer in an incredibly competitive and high-priced market,” he said.
