BAM Key Details:

  • The number of U.S. cities where the typical home value is $1M or more was 522 in July 2022. In January 2023, six months after that peak, the number was 464. 
  • California alone has 190 of those million-dollar cities—more than the next six states combined—with New York, San Francisco, and Los Angeles having (and losing) the most million-dollar cities. California lost 20 over the past six months. 

Since the housing market’s peak in July 2022, the number of U.S. cities where the typical home has a market value of $1 million or more has dropped from 522 to 464, according to a new Zillow analysis. 

On average the typical home in million-dollar cities lost $114,500 in market value since July. 

Zillow-million-dollar-homes-graph

Source: Zillow

California alone has 190 of those million-dollar cities—down from 210 last July—with New York City, San Francisco, and Los Angeles metro areas having and losing the most million-dollar cities. 

When mortgage rates spiked in the second quarter of 2022, both housing demand and supply hit a wall as fewer buyers could afford homes with higher price tags. Those still determined to buy flocked to more affordable metros, while the drop in demand drove prices down in the most expensive markets. 

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. 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. Getting the pricing right and boosting a home’s online curb appeal are keys to success for this spring’s sellers.

Anushna Prakash

Economic Data Analyst at Zillow

Home values see a bigger drop in current million-dollar cities

According to the Zillow Home Value Index, the typical U.S. home dropped 4.1% in value compared to last July. By comparison, the typical home in million-dollar cities dropped 6.3%, on average, during the same period. 

Thirty-two of the 50 states have at least one million-dollar city. Last summer there were 33, but Montana’s lone million-dollar city—Gallatin Gateway—dropped off that list when its typical home lost roughly $117,000 in value from its peak last June, landing at $987,824 in January 2023. 

Of the 464 cities still on the million-dollar list, 387 are in coastal states. California alone has 190 of them—more than the next six states combined. Thirty-seven of those million-dollar cities are valued at over $3 million; 36 are in coastal states, while one is in Hawaii. 

At the state level, California has lost 20 million-dollar cities. Next up, Texas and New Jersey each lost five million-dollar cities, Florida lost four, and Utah and Hawaii each lost three. 

At the metro level, the New York City area has 90 million-dollar cities, followed by— 

  • San Francisco, with 67 million-dollar cities
  • Los Angeles (53)
  • San Jose (21)
  • Boston (19) 

Los Angeles has lost seven million-dollar cities since last July, followed by the New York City metro area (6), San Francisco (4), and Austin (3). 

The loss of million-dollar cities by state:

  1. California (from 210 July 2022 to 190 January 2023)
  2. New York (from 66 to 64)
  3. New Jersey (from 37 to 32)
  4. Florida (from 32 to 28)
  5. Massachusetts (from 27 to 26)
  6. Colorado & Washington (from 18 to 16)
  7. Hawaii (from 17 to 14)
  8. Texas (from 15 to 10)
  9. Maryland (holding steady at 7)
  10. South Carolina (holding steady at 6)
  11. Connecticut & Virginia (from 6 to 5)
  12. Utah (from 7 to 4)
  13. Minnesota & Tennessee (from 5 to 4)
  14. Nevada & Wyoming (holding steady at 4)
  15. Missouri & North Carolina (from 5 to 3)
  16. Illinois (holding steady at 3)
  17. Arizona & Idaho (from 3 to 2)
  18. New Hampshire, Ohio, Wisconsin (holding steady at 2)
  19. Delaware, Georgia, Kansas, Michigan, Pennsylvania, Rhode Island (holding steady at 1)
  20. Montana (from 1 to zero)

Top takeaways for real estate agents

Considering high-end home values seeing bigger drops, compared to relatively affordable homes, make sure you point this out for clients looking to buy or sell at those price points. 

Find ways to help these clients get the best value from their transactions and to make the most of the opportunities this market affords them, especially if your goal is to become a luxury agent (assuming that’s a reasonable goal in your local market). 

And keep a close watch for any new developments in your local market that are likely to impact potential buyers and sellers, so you can clear up any misconceptions and help them see the way ahead.