What would you do with a (couple) million dollars? If you are in the U.S., it looks like people are using it to buy homes.
A report from Zillow shows that since 2014, 346 more neighborhoods have reached millionaire status, rising from 958 neighborhoods to 1,280 neighborhoods. This means that nearly one in 20 zip codes qualify as millionaire neighborhoods. Zillow researched residential ZIP codes across the country, looking for places where at least 10 percent of homes in the area are worth $1 million or more and found about 4 percent of all ZIP codes analyzed qualified as millionaire neighborhoods.
Though the West Coast has seen the most growth in property/neighborhood value, in Boston there are currently a whopping 74 million dollar neighborhoods, seven of them popping up in the past year alone.
U.S. home values are the highest they have ever been. On the plus side, many neighborhoods in the U.S. are flourishing. However Zillow’s Chief Economist, Dr. Svenja Gudell says, “As home values hit seven figures in many neighborhoods, it’s going to have real impacts on affordability for middle-class homeowners whose incomes haven’t kept up, and this imbalance especially has implications for people on fixed income whose property taxes are rising along with their home value.”
Million-dollar ZIP codes have passed their pre-recession housing market peak from 2007, when there were 1,108 million-dollar ZIP codes — 3.77 percent of those examined.
Not all markets are seeing an increase in the share of $1 million neighborhoods. Las Vegas has only gained one $1 million neighborhood since 2014. In St. Louis and Cincinnati, where the median home value is nearly $50,000 below the national median of $200,000, no new $1 million neighborhoods were added over the past 10 years.
