U.S. Housing Market Sees Drastic Shift: 58 Million-Dollar Cities Lost in Six Months
The U.S. housing market has seen a drastic shift since July 2020, when the market peaked. According to a new Zillow analysis, 58 “million-dollar” cities have been lost in the six months since the peak, with the typical home in million-dollar cities losing an average of $114,500 in value. California has seen the steepest declines, with 20 cities falling off the list of million-dollar cities, followed by Texas and New Jersey with five each.
The New York City metropolitan area has the highest number of cities with a million-dollar population, totaling 90. San Francisco, Los Angeles, and San Jose come next, with Boston rounding out the top five. Coastal states continue to dominate the list of million-dollar cities, with 387 out of the 464 current million-dollar cities located in a state on either the East or West Coast. The state of California is home to 190 million-dollar cities, more than the total number of such cities in the next six states combined.
In comparison to other areas, the Bay Area has experienced a significantly larger reduction in home prices. San Francisco’s median sale price fell 9.4% year over year in January and Oakland’s fell 7.8%, two of the three largest declines in the U.S. Rising mortgage rates have hit expensive markets particularly hard because homes there are so expensive, with even a small bump in rates translating to a big increase in monthly mortgage payments.
Anushna Prakash, economic data analyst at Zillow, notes that despite the price cuts, mortgage rates have made it difficult for buyers. However, as we enter home shopping season this spring, Prakash adds that the environment has become more favorable for those who can make the finances work. Success for sellers this spring will depend upon getting the pricing right and increasing a home’s appeal on the web.
Overall, 32 states had at least one million-dollar city, but that’s down from 33 states in July 2022 since Montana’s lone million-dollar city fell off the list.
Tracking a slowing housing market nationwide, home values and prices have dropped from record highs as 6.5%-plus mortgage rates dampen homebuying demand.
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