146 Cities Joined the Million Dollar List in 2021 — How Does That Impact Your Ability To Buy a Home?
Living in a million-dollar city sounds awesome. Your world will be filled with golden playgrounds, five-star restaurants and designer boutiques, right? Nah. What it really means is that homes are very expensive, and your monthly mortgage payment could be a real whopper.
A “million-dollar city” is one in which the typical home value is at least $1 million — and there are a lot of those popping up in the United States. A record 146 new U.S. cities became million-dollar cities in 2021, which was the highest-ever number of new entrants in a single year, according to a new report from Zillow. That brought the total to 481 cities nationwide.
The number of cities that rose above $1 million in value last year is almost triple the number in in 2020. That shouldn’t come as a surprise, considering that home values in the U.S. grew at a record pace in 2021, with Zillow estimating that the typical U.S. home value grew just less than 20% for the year.
Don’t look for much letup this year, either. As GOBankingRates previously reported, Zillow expects average U.S. home prices to rise 14.3% in 2022 vs. last year, with certain cities in the South eyeing much higher increases.
Prices have been pushed up by surging demand for housing and a shortage of supply as the home building industry contends with supply chain problems, a shortage of raw materials and not enough workers. Rising mortgage rates could push the cost to buy a new home even higher.
The good news is, you don’t have to dish out anywhere near $1 million for the typical home in the U.S. The average home value in the U.S. currently stands at $325,677, according to Zillow.
In keeping with recent trends, the majority of million-dollar cities are located within a few large coastal regions. The San Francisco and New York metro areas lead with 76 million-dollar cities each. The Los Angeles metro are comes next with 57 cities on the list, followed by San Jose, California with 22. About 60% of all million-dollar cities lie within eight metro areas, and almost half (44%) are in California.
But even states like Idaho, Montana and Tennessee now have million-dollar cities. And the most expensive city is Indian Creek, Florida, an exclusive 300-acre island in Biscayne Bay in Miami. A typical home there costs around $28.3 million.
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