Each year, Capgemini publishes the U.S. Metro Wealth Index, which ranks the number of high-net-worth individuals living within the ten largest metropolitan statistical areas. According to the report, high-net-worth Individuals “are defined as those having investable assets of $1 million or more, excluding primary residence, collectibles, consumables, and consumer durables.”
Since the last report, the number of millionaires has increased by 7.3 percent, following a gain of 17.5 percent in 2009, which came after a steep drop in 2008. Despite the rosy state of America’s rich, the same cannot be said for the residents of the cities these millionaires call home. A review of the local economies of these cities demonstrates that the fortunes of the rich don’t depend on how their neighbors do.
Unemployment remains a significant issue for the country. Half of the cities on this list have unemployment rates above the national average of 9.1 percent. San Jose, San Francisco and Chicago are over 9.3 percent. Los Angeles and Detroit are both over 11 percent.
Housing markets in most of these cities present an even starker contrast. Eight of the ten markets on the list were flat or decreased in value. While Boston, Philadelphia and New York dropped less than 5 percent, in Chicago, Detroit and San Francisco housing dropped in excess of 10 percent.
Despite moribund local economies, millionaires in all of these cities increased in number, in some cases significantly. Houston had 88,200 millionaires in 2009. In one year, the number of millionaires grew 9.6 percent to 96,700. This followed an impressive gain in the prior year, when the number of millionaires in the city grew nearly 30 percent. The number of millionaires in other cities on the list also grew significantly between 2008 and 2009, and less the following year. San Jose’s millionaire population increased by 24.5 percent in the first period and only 2.7 percent in the most recent. These initial recoveries have as much to do with the drops in wealth in 2007 as anything else.
While there is a clear disconnect between the fates between the cities’ millionaires and their average residents, the reasons why the wealthy became wealthier seem to be the same. In all of the cities on the list industry recovered. In New York and Chicago, finance prevailed. In Houston, energy powered the economy. In San Jose, it was tech. And although gains were seen, in sales and stock price, the fortunes of average workers have remained constant and in some places become worse.
To provide perspective on the local economies on the Cap Gemini’s list, 24/7 Wall St. used Zillow’s real estate database for the yearly change in home value for each metropolitan statistical area in June 2011. We also included the most recent unemployment data for each area. Finally, we reviewed the Fortune 500 list to identify the largest publicly traded companies that are headquartered in those cities.
These are the American Cities with the Most Millionaires.