While $1M signified luxury property a short while ago, it’s now 8% of the nation’s housing stock – but a large percentage of those homes are still in Pacific Coast states.

SEATTLE – Just over 8% of U.S. homes are worth $1 million or more, near June 2022’s all-time high of 8.6%, according to a report from Redfin.

The share of homes worth seven figures is on an upswing after dipping to a 12-month low (7.3%) in February because prices are rising on a year-over-year basis after a decline early in the year.

Overall, the median U.S. home-sale price rose 3% in July, the biggest increase since last November, according to Redfin, with luxury home prices rising even faster – up 4.6% year over year to $1.2 million in the second quarter.

Elevated mortgage rates discourage potential home sellers, who are staying put to keep their relatively low mortgage rates. As a result, inventory dropped so low that buyers still in the market are competing for those few homes that are for sale. That’s driving up home prices and pushing many of those listings above the million-dollar mark.

“The supply shortage is making many listings feel hot,” said Redfin Economics Research Lead Chen Zhao. “In most of the country, expensive properties that are in good condition and priced fairly are attracting buyers and in some cases bidding wars, mostly because for-sale signs are few and far between right now.”

The share of homes worth seven figures has doubled since before the pandemic. In June 2019,  just over 4% of homes were valued at $1 million or more.

East Coast metros gain most $1 million-plus homes

Over one-quarter (25.8%) of homes in the Bridgeport, CT metro – which has many popular New York City suburbs – are worth at least $1 million, up from 23.1% a year ago, the biggest increase of the metros analyzed. It’s followed by Boston, where the share increased from 20.3% to 21.5%, and Newark, N.J. (8.7% to 9.7%).

The portion of homes worth $1 million or more is up year over year in 55 of the 99 most populous U.S. metros. But the uptick is small, less than one percentage point, in almost all of those. The portion of million-dollar-plus homes is unchanged in three metros and down in the remaining 41.

West Coast losing $1 million-plus homes but still has a lot

Share of seven-figure homes is falling in pricey West Coast metros, but they still make up substantial portion of homes

Expensive coastal metros are losing million-dollar homes fastest. The share dropped from 39.3% to 33% over the last year in Seattle, the biggest decline of the metros in this analysis. It’s followed by Oakland, Calif. (55.1% to 49%) and Oxnard, Calif. (40.2% to 34.5%).

Los Angeles, San Diego, San Jose, San Francisco, Anaheim, New York and Washington, D.C. are also among the metros where the share fell.

California still tops for $1 million-plus homes

California has the highest share of million-dollar-plus homes in the country – by far. First is San Francisco, where 81.2% of homes are worth at least $1 million, down from 84.2% a year earlier. It’s followed closely by San Jose (79.6%, down from 82.9%).

Next comes Anaheim, Oakland, San Diego and Los Angeles, all places where the share of seven-figure homes has fallen a bit over the last year, but where roughly 40% to 50% of all homes are still worth at least $1 million.

Million-dollar homes are virtually nonexistent in some parts of Texas and the Rust Belt. There are essentially no million-dollar homes in several inexpensive metros, including parts of Texas and upstate New York.

© 2023 Florida Realtors®

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Author: kerrys