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.
Whereas other markets, such as stocks and cryptocurrency, struggle, real estate values continue to rise across the United States, reaching new highs. It’s a continuation of the pandemic-era trend, in which historically low mortgage rates, a scarcity of available homes, and a renewed focus on work-life balance spurred historic price gains. Last year, the average home gained in value by 19.6%.
In 2021, cities like Idaho, Montana, and Tennessee crossed the million-dollar barrier for the first time, as worried homebuyers migrated to places with lower 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.
Despite this, California, Massachusetts, and New York had the most new cities with average property values in the seven figures. The single most expensive location is in Indian Creek Village, Florida, where the average property is valued at $28.3 million, albeit the small sample size. Tom Brady and Gisele Bundchen are among the less than 100 residents of the 300-acre island near Miami.
Atherton, on the San Francisco Peninsula, came in second with an average home value of $7.7 million. Hunts Point, Washington, was ranked first, followed by Jupiter Island, Florida, and Sagaponack, New York. Each is worth around $6 million on average.
And there’s more to come: according to Zillow, 49 more cities might join the $1 million club by the middle of the year if current price trends continue.
