SEATTLE – (By Dale King, Realty News Report) – A new report from Seattle-based brokerage Redfin finds that nearly one in 10 U.S. homes—8.5 percent—now carries a valuation of $1 million or more, the highest share on record for seven-figure properties.
That percentage is up from 7.6 percent a year earlier and more than double the roughly 4 percent share recorded before the pandemic, the report says.
Redfin attributes the record number of million-dollar homes to record-high home prices nationwide. “The median sale price nationwide was up 4 percent year-over-year in June,” the company notes. “Although price growth has eased slightly since early 2024, year-over-year gains over the past year have pushed many homes above the million-dollar threshold.”
At the same time, mortgage rates have remained well above the pandemic-era lows since early 2022, which pushed monthly housing costs to historic highs and contributed to lower sales activity.
80 Percent of San Francisco Homes Are Worth a Million
California’s high-priced metros are leading the nation in growth of seven-figure homes, Redfin reports. In San Francisco and San Jose, about 80 percent of homes are now valued at $1 million or more. Anaheim follows, with 58.8 percent of homes at or above that level. The median sale price in the Bay Area sits at roughly $1.5 million, according to the report.
Other large increases occurred in San Diego, where 42.6 percent of homes are now worth at least $1 million (up from 36.5 percent), and Los Angeles, at 39.3 percent (up from 35 percent). Those metros crossed the seven-figure mark quickly because their median prices were already close to $1 million—so a modest rise pushed many listings over the threshold.
Across the 50 most populous U.S. metros, the share of homes worth $1 million or more rose year-over-year in all but three. Austin saw a slight decline to 10 percent from 10.1 percent a year earlier. Indianapolis held steady at 2 percent, and Houston remained at 3.6 percent.
Extensive new construction in parts of Texas—especially Austin and Houston—has added supply and helped restrain price growth, which is one reason the share of million-dollar homes has not risen in those markets.
On the West Coast, rising home prices, higher insurance costs and persistent mortgage rates have pushed many buyers out of the market or made them wary of committing to large monthly payments. “The people who are buying without hesitation are in tech and work at Google, Apple, Facebook or a similar company,” said Julie Zubiate, a Redfin Premier agent in the Bay Area, where most homes sell for at least $1 million.
She added that many Bay Area buyers without tech-sector incomes are becoming more selective and more likely to walk away over smaller issues uncovered in inspections—the math of paying so much for a home makes buyers demand more of their must-have list.
Zubiate also noted that the recent decline in mortgage rates has given some buyers increased purchasing power—often tens of thousands of dollars—bringing more buyers back into the Bay Area market.
At the other end of the spectrum, several large metro areas still have virtually no million-dollar homes. In Detroit, Cleveland, Pittsburgh and Kansas City, fewer than 1 percent of homes reach the million-dollar mark.
Aug. 22, 2024 Realty News Report Copyright 2024
Photo: Cynthia Lescalleet, CALpix Copyright 2024
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