Home prices are continuing to bulldoze records—mounting so much, in fact, that hundreds of neighborhoods have recently joined the million-dollar club, where at least 10 percent of homes are worth $1 million or more, according to an analysis by Zillow. Approximately 345 million-dollar neighborhoods have cropped up in the last three years, with the Los Angeles, New York and San Francisco metro areas forming the most million-dollar neighborhoods since 2014.
“As home values reach new peaks, $1 million homes are increasingly common, even in neighborhoods once considered middle class,” says Dr. Svenja Gudell, chief economist at Zillow. “The U.S. median home value is just over $200,000, but in San Francisco, Los Angeles and other expensive cities, homes are worth much more.”
New York has added 53 new million-dollar neighborhoods in the past three years, the analysis found; San Francisco has added 36 and Los Angeles has added 29. The Minneapolis-St. Paul, Boston, Miami-Ft. Lauderdale and San Jose metro areas have also added million-dollar neighborhoods in substantial numbers.
Several metro areas, however, have added no million-dollar neighborhoods at all since 2014, speaking to their relative affordability even as prices rise: Cincinnati, Cleveland and Columbus, Ohio; Charlotte; Houston; Indianapolis; Orlando; Pittsburgh; Phoenix; and Tampa.
Still, the growth of million-dollar neighborhoods could spell trouble for the middle-class and for those who would have difficulty weathering property tax hikes, Gudell says.
“As home values hit seven figures in many neighborhoods, it’s going to have real impacts on affordability for middle-class homeowners whose incomes haven’t kept up, and this imbalance especially has implications for people on fixed incomes whose property taxes are rising along with their home value.”
All told, the analysis tallied 1,280 million-dollar neighborhoods. Four percent of the roughly 30,000 zip codes weighed had at least 10 percent of homes worth $1 million or more.
For more information, please visit www.zillow.com.
Suzanne De Vita is RISMedia’s online news editor. Email her your real estate news ideas at sdevita@rismedia.com.
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