By Jonathan Levin and Claire Ballentine
The unceasing demand for U.S. real estate has pushed average home values over seven figures in hundreds of cities for the first time.
Homes valued at $1 million or higher are now the norm in 481 U.S. cities, more than double the number just five years earlier. In 2021 alone, 146 cities reached that level, according to Zillow data released Wednesday. That’s the most ever in a single year.
By comparison, the number of towns with seven-figure average home values was 234 in 2016 and just 126 a decade ago.
Real estate values are still soaring across the U.S., reaching new heights even as other markets like stocks and cryptocurrencies suffer. It’s a continuation of the pandemic-era trend in which low mortgage rates, a shortage of available homes and a newfound focus on work-life balance combined to spur historic price increases. The average home last year gained 19.6% in value.
Cities in states like Idaho, Montana and Tennessee broke the million-dollar threshold for the first time in 2021, as anxious homebuyers searched out markets with cheaper prices.
“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,” Jeff Tucker, senior economist for Zillow, said in the release.
Still, California, Massachusetts and New York had the most new cities with seven-figure average home values. Florida boasts the single priciest place: the municipality of Indian Creek Village, where the typical home is valued at $28.3 million, albeit with a small sample size. The 300-acre island near Miami has less than 100 residents, including Tom Brady and Gisele Bundchen.
In second place was Atherton on the San Francisco Peninsula with an average home value of about $7.7 million. Hunts Point, Washington along with Jupiter Island, Florida, and Sagaponack, New York rounded out the top five. Each has an average value of about $6 million.
And there’s more to come: 49 more cities could become members of the $1 million club by the middle of the year, if current price trends hold, Zillow says.
Among the surprise million-dollar jurisdictions on the list, this is a sampling of the newcomers:
- Garrison, Montana: Avg. home prices +26% in 2021 to $1.2 million.
- Gallatin Gateway, Montana: Avg. home prices +33% to $1.2 million.
- West Glacier, Montana: Avg. home prices +23% to $1.2 million.
- Ketchum, Idaho: Avg. home prices +32% to $1.1 million.
- Sun Valley, Idaho: Avg. home prices +31% to $1 million.
- Hayden Lake, Idaho: Avg. home prices +47% to $1 million.
- Brentwood, Tennessee: Avg. home prices +37% to $1 million.
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