U.S. Has Fewer $1M Homes – But Fla. Has More

SEATTLE – Just over 7% of U.S. homes were worth $1 million or more in January 2023, according to a report from Redfin, which is a decline from June 2022’s all-time high of 8.6% and essentially unchanged from a year earlier. Still, the share of luxury homes is up from 4.2% just before the pandemic began.

Home values and prices have dropped from record highs as 6.5%-plus mortgage rates dampen homebuying demand. The drop in luxury-home share reflects the number of homes worth slightly more than a million that have recently dropped below, though some of the decline compared to June’s peak reflects seasonal changes.

Florida, however, has maintained its home values so far, and in most metros included in the study, the share of homes worth $1 million or more has gone up, and the state now had a higher share of these luxury properties in January that it did one year earlier.

Top 5 metros for an increase in $1M-plus homes

1. Miami: Roughly 1 in 7 (14.4%) of Miami homes are worth at least $1 million, up from 11.5% a year ago, the biggest increase of the metros in this analysis.
2. North Port, Fla.: 11.3%, up from 9.1%
3. Anaheim, Calif: 54.2%, up from 52.2%
4. Nashville: 8.4%, up from 6.4%
5. West Palm Beach: 12.8%, up from 11.1%

Million-dollar homes makeup a larger chunk of Florida’s housing stock because many parts of the state are still seeing substantial upticks in home values and prices, according to Redfin. Florida was home to six of the 10 metros with the biggest home-value increases last year.

Florida homes are holding their value because of a still-healthy demand from buyers, especially out-of-town remote workers moving in from more expensive parts of the country. Five of the nation’s 10 most popular migration destinations are in Florida, despite its status as the most hurricane-prone state in the U.S.

Nationwide, however, buyer demand has declined.

“Home values are coming down from their peak and fewer sellers could fetch seven figures – but that doesn’t mean buyers are getting a break,” says Redfin Economics Research Lead Chen Zhao. “The typical homebuyer’s monthly mortgage payment is even higher than it was when home values peaked in the spring because rates are so much higher. And although home prices have come down, they certainly haven’t crashed.”

The share of homes valued at seven figures-plus is falling quickest in the San Francisco Bay area and other expensive coastal areas. Just over 80% of San Francisco homes are worth at least $1 million – the biggest share of the 99 most populous U.S. metros, but down from 86.3% a year ago.

All in all, the portion of U.S. homes worth at least a million dollars is up from a year earlier in 70 of the 99 most populous U.S. metros. It’s unchanged in 11 and down in the remaining 18.

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