It is hard to imagine a hotter residential home market than the one in the United States right now. The frenzy of activity has gone on for two years. January data proves the rise will not end in the near future.
Some markets have drawn so many buyers that home prices in them have soared over 50% in the past several quarters. The median home price in America sits at a record $350,000. The figure could move closer to $400,000 by year’s end.
Among the reasons for the jump is that people want to move from the most expensive markets, particularly those on the coasts. Home prices have reached two to three times the national median in New York and San Francisco. Prices in smaller inland cities run well below those levels. And the overall cost of living outside these cities attracts people who want their dollars to go further.
Low mortgage rates (which have started to rise) also have encouraged buyers. Mortgage activity reached an amazing level as home prices have risen.
Finally, the COVID-19 pandemic triggered a shuttering of business offices. Some people have been told they will not need to return to do their offices. This has created an unusual chance for mobility for millions of Americans.
America has always had rich enclaves, and they continue to be the locations of expensive homes. Often these have become vacation destinations. Others are suburbs of large cities. Still, others are large cities that have had tremendous influxes of populations, in particular ones where buyers are well educated and have high incomes.
According to Realtor.com’s just-released Living the Dream: Here Are the Hottest Luxury Real Estate Markets in America Right Now report, the top 1% of homes for sale nationwide have a median listing price of $5.5 million in January. Frank Nothaft, the chief economist at CoreLogic, pointed out that “Those who have been very successful, who kept their jobs, and [who] saw the stock market go through the roof cashed out their gains to use that as their down payments to buy a second home.” The study looked at the top 1% of homes based on price in large metro areas.
The top market based on this measure is Kahului, Hawaii. The top 1% of homes based on price have a median value of $23.9 million.
Here are the top 10 markets and the median value of the top 1% of homes there:
- Kahului, Hawaii ($23.9 million)
- San Luis Obispo, Calif. ($40.0 million)
- Sebastian, Fla. ($6.2 million)
- Hilton Head, S.C. ($5.5 million)
- Wilmington, N.C. ($3.8 million)
- Barnstable, Mass. ($15.9 million)
- Austin, Texas ($5.0 million)
- Portland, Me. ($4.9 million)
- Salt Lake City, Utah ($4.2 million)
- Prescott, Ariz. ($5.7 million)
Click here to see which city has the most expensive houses in each state.
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