Nearly half of California’s cities cost at least $1 million to buy a new home. 237 cities across the country have become “million-level” cities.
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A typical first home costs at least $1 million in 237 U.S. cities, a significant increase since the pandemic, according to a new Zillow report released Thursday.
That number is nearly three times higher than before the pandemic, when a typical starter home cost at least $1 million in 84 cities. Report findings.
California accounts for nearly half of all cities on the million-dollar list, with 117 cities, followed by New York (31) and New Jersey (21).
“Today’s homebuyers are struggling with affordability and availability. In hundreds of cities, $1 million is the standard for a starter home,” said Zillow senior economist Orphe Divounguy. “However, for first-time homebuyers, , there seems to be some good news. More homes are for sale, price reductions are increasing, and as homes come on the market, buyers have a few days to weigh their options.
Entry-level homes are defined as homes in the lowest third of home values in a given area.
Zillow says the typical starter home in the U.S. sells for $196,611. Over the past five years, this figure has increased by 54.1%, a growth rate that exceeds the increase in typical home prices over the same period.
The New York metropolitan area, which includes parts of New Jersey and Pennsylvania, has more million-dollar cities than other regions, Zillo said. San Francisco came in second, followed by Los Angeles, San Jose, Miami and Seattle.
Zillow notes that these markets tend to have stricter zoning regulations, which make it more difficult to build new housing.
“Markets with the strictest building codes tend to have more cities with $1 million in new homes,” Zillow said. “They are also markets with lower homeownership rates.”
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