Record number of US homes are now worth more than $1m

Seven out of ten most expensive metro areas are in California

A record number of homes in the US are now worth more than $1m.

According to Redfin, the number of homes worth more than a million has almost doubled compared to before the pandemic, going from 4.8 per cent in February 2020 to 8.2 per cent in February 2022.

As a result, the wealth of homeowners is increasing while many prospective buyers are being priced out.

Many renters will be unable to buy a home as incomes are rising more slowly than the price of homes.

Discount real estate brokerage Redfin has said that the Bay Area is leading the charge, prompting a record number of homes to breach the $1m pricetag.

Almost 9 out of 10 homes for sale in San Francisco and San Jose are listed at $1m or more.

In Anaheim, southeast of Los Angeles, California, the biggest rise in $1m homes took place. Last month, 55 per cent of homes were worth more than $1m, compared to 27 per cent in 2020.

Last month, 88.7 per cent of homes in San Francisco were worth more than $1m – the most of any city in the US. Seven of the top ten cities for $1m homes are in California.

Both buyers and realtors have said that there aren’t enough homes in the US, and the rising trend of remote work during the pandemic, coupled with low mortgage rates, have led to a spiking market, Axios noted.

“During the four weeks ending Feb 27, the number of homes for sale plummeted 50% from two years earlier to an all-time low of 456,000,” Redfin said. “That helped fuel a 33% rise in the median US home-sale price, which hit a record high of $363,975.”

In Albuquerque, New Mexico, 25 per cent of homes are worth more than $1m, the same is true for 18.1 per cent of homes in Boston, Massachusetts, 12.3 per cent in Austin, Texas, 10.9 per cent in Washington, DC, 9.7 per cent in Denver, Colorado, and 7.8 per cent in Pheonix, Arizona.

The metro area analyzed by Redfin with the lowest share of $1m homes was Elgin, Illinois. El Paso, Texas, Columbia, South Carolina, McAllen, Texas, Dayton, Ohio, and Buffalo, New York all had a share of 0.2 per cent of homes worth more than a million.

Redfin said they estimated the current and past value of 85 million properties in the US.