U.S. Loses 58 ‘Million-Dollar’ Cities

Last year, 522 U.S. towns/cities had an average home price of $1M or more, but 58 of those have seen average prices drop below $1M, including four in Fla.

SEATTLE – The U.S. has lost 58 “million-dollar” cities – cities where the typical home is worth $1 million or more – since the housing market peaked last July, according to a Zillow analysis.

In the six months after the peak, the typical home in million-dollar cities lost an average of $114,500 in value, which was enough to drop 58 of them from the list. There are currently 464 U.S. cities/towns where the typical home value is $1 million or more; there were 522 at the housing market’s peak last July.

Last year set a record for the most new million-dollar cities amid supercharged housing demand, but both demand and supply hit the brakes in the second half of 2022 after mortgage rates spiked. Buyers flocked to lower-priced homes, a reversal from earlier in the pandemic, and expensive markets felt the biggest slowdown.

“Unfortunately for buyers, mortgage rates have overwhelmed these price cuts. But even though competition is picking up as we enter home shopping season this spring, it’s a much friendlier environment to buy a home for those who can make the finances work,” says Anushna Prakash, economic data analyst at Zillow.

“Sellers may have missed the market’s peak, but they can still get a higher price for their homes than last year in most markets, and certainly more than they would have before the pandemic,” she adds. “Getting the pricing right and boosting a home’s online curb appeal are keys to success for this spring’s sellers.”

In January, Florida had 28 million-dollar cities by Zillow’s estimate, down from 32 in July 2022.

Overall, 32 states had at least one million-dollar city, but that’s also down from 33 states in July 2022 since Montana’s lone million-dollar city fell off the list: Gallatin Gateway, a small community in the Bozeman area, is an example of how it works. It saw its typical home value fall to $987,824 – down about $117,000 since peaking in June.

Of the 464 current million-dollar cities, 387 are in coastal states. California alone has 190 million-dollar cities, more than the next six states combined. There are 37 cities with a typical home value of more than $3 million, 36 of them in coastal states and one in Hawaii.

California has lost 20 million-dollar cities since July, easily more than any other state. Texas and New Jersey are next, losing five million-dollar cities each. Florida has lost four, and Utah and Hawaii have each lost three.

At the metro level, the New York City area has the most million-dollar cities, with 90. San Francisco (67 million-dollar cities), Los Angeles (53) and San Jose (21) are next, with Boston (19) holding enough strength to round out the top five, after tying with Seattle at this time last year.

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