“Million-dollar cities” skyrocketed in 2021, with typical home values reaching at least $1 million in a record 146 new U.S. cities.
Zillow found there are now 481 cities where the average home is worth $1 million or more, and an additional 49 cities could make the list by mid-2022 if home appreciation continues at its current rate.
Typical home values jumped 19.6% in 2021 as homebuyers faced severe stock shortages, causing bidding wars that pushed prices up. Homeowners gained $2.6 trillion in tappable equity in 2021, up by 35% YOY for an aggregate total of almost $10 trillion.
In Q4 2021 alone, tappable equity rose by nearly half a billion dollars.
“Home price appreciation over the course of 2021 was unlike anything that’s come before, and the incredible growth we’ve seen in homeowner equity is testament to that fact,” said Black Knight Data & Analytics President Ben Graboske.
The 146-city increase is the most ever in a single year, almost triple that of 2020 and more than in the past six years combined.
Most million-dollar cities are in expensive coastal regions such as the New York and San Francisco metros, both of which have 76 million-dollar cities. The Los Angeles metro comes in third with 57, followed by San Jose with 22. Of all million-dollar cities, 60% are within a mere eight metros, with nearly half in Calfornia (44%).
“The surge in demand for housing last year sent home values skyrocketing, even in places where prices already were sky-high, and that helped tip a record number of cities into the million-dollar club,” said Jeff Tucker, Zillow senior economist.
“The locations of these newly seven-figure towns bust the myth that everyone fled California and the Northeast last year, as California, Massachusetts, and New York led the pack for the most new cities with home values above $1 million. Still, we’re seeing how the geography of wealth in the U.S. has begun to shift, as 2021 was the first year for both Idaho and Montana to place any cities on this list, and now those Western states boast three million-dollar cities each.”
Indian Creek, Florida, is the most expensive city in America with a typical home value of about $28.3 million. Atherton, in the San Francisco metro area, is in second place, with home values averaging $7.7 million, followed by Hunts Point, Washington; Jupiter Island, Florida; and Sagaponack, New York, with typical home values of roughly $6 million each.
“With such sharp increases in home prices over the last year, we’re seeing tons of demand come from current homeowners who’ve decided to tap into their home equity to move up into their dream home,” said Erik Throm, an agent with Fast Real Estate in San Francisco.