The number of cities where typical home values are at least $1 million has grown 51 percent over the last five years, but the pace of growth has slowed in the past year, according to an analysis by Zillow.
There are 218 cities deemed “million-dollar cities” by the Zillow analysis, up three from the end of 2018 and up from 144 five years ago.
A total of seven cities joined the list in 2019, but four fell off – the first time since 2016 in which any cities fell off list, as home values declined in some expensive areas after a period of extreme price growth.
“Odd though it may seem, it’s the cities at the top that are ‘struggling’ the most during this return to normalcy in the market,” said Skylar Olsen, Zillow’s director of economic research, in a press release accompanying the report. “More than just slower growth, home values good and truly fell in many of these hubs of luxury, a sign that the excessive home value appreciation of the past several years drove prices too high – even beyond the reach of those who could afford almost anything almost anywhere else."
The seven cities that joined the list in 2019 are Santa Ynez, Calif.; Telluride, Colo.; Forest Hills, Tenn.; Sierra Madre, Calif.; McLean, Va.; Moose, Wyo.; and Redondo Beach, Calif.
The four which fell off of the list are San Jose, Calif.; San Quentin, Calif.; Lexington Hills, Calif.; and Laie, Hawaii.
Cities in the San Francisco, New York and Los Angeles metros dominate the list. More than half of all $1 million cities come from just these three metros. Boston, San Jose and Miami have the next-most.
If current rates of appreciation hold throughout 2020, 11 cities that just missed out in 2019 will join the $1 million club next year – Needham, Mass.; Edgartown, Mass.; Longport, N.J.; and eight California cities: East Pasadena, Glen Ellen, Alameda, View Park-Windsor Hills, Avila Beach, Clayton, Carmel Valley and Dana Point.
Five cities will lose their $1 million status in 2020, assuming their current rates of decline hold true: Kailua, Hawaii; Milpitas, Calif.; Harding Township, N.J.; Daly City, Calif; and Fremont, Calif.