Markets
Mapped: The 22 Cities With the Most $1 Million Homes in the U.S.
Map: The 22 Cities With the Most $1 Million Homes
Throughout most of America, owning a $1 million home gives you definite bragging rights – it means you may have six bedrooms, 5,000 square feet, an infinity pool, and at least a few acres of property.
But along the coasts – and particularly in California – the two comma club has lost most of its novelty. That’s because in some places, like San Jose, CA, the majority (53.8%) of homes are already soaring past the $1 million mark, despite most of them looking nothing more than ordinary.
$1 Million Homes by City
Today’s chart uses data from a study by LendingTree, which ranks the largest 50 U.S. cities by the percentage of million dollar homes in each metro area. The data from the study was pulled out of a database of 155 million property prices throughout the country.
Here are the 22 U.S. cities that have at least 1% of their housing stock exceeding the $1 million value mark:
| Rank | City | % of $1mm homes | Median home price |
|---|---|---|---|
| #1 | San Jose, CA | 53.81% | $1,069,000 |
| #2 | San Francisco, CA | 40.03% | $891,000 |
| #3 | Los Angeles, CA | 17.23% | $622,000 |
| #4 | New York, NY | 11.81% | $454,000 |
| #5 | San Diego, CA | 10.55% | $563,000 |
| #6 | Seattle, WA | 9.90% | $461,000 |
| #7 | Boston, MA | 7.95% | $459,000 |
| #8 | Washington, DC | 5.27% | $395,000 |
| #9 | Miami, FL | 3.79% | $267,000 |
| #10 | Denver, CO | 2.65% | $391,000 |
| #11 | Austin, TX | 2.16% | $282,000 |
| #12 | Portland, OR | 1.95% | $378,000 |
| #13 | Sacramento, CA | 1.72% | $378,000 |
| #15 | Nashville, TN | 1.52% | $235,000 |
| #14 | Houston, TX | 1.52% | $192,000 |
| #16 | Phoenix, AZ | 1.51% | $242,000 |
| #17 | Providence, RI | 1.32% | $266,000 |
| #18 | Dallas, TX | 1.31% | $213,000 |
| #19 | Chicago, IL | 1.30% | $223,000 |
| #20 | Riverside, CA | 1.12% | $332,000 |
| #21 | Baltimore, MD | 1.07% | $270,000 |
| #22 | Charlotte, NC | 1.02% | $187,000 |
The data looks pretty telling, with four of the top five cities being located in California. In each of those cities, more than 10% of all homes have surpassed the $1 million mark.
In the Bay Area specifically, prices are amplified even further: San Francisco (40.0%) and San Jose (53.8%) have by far more $1 million homes than other major cities in the country. It’s also worth noting that in San Jose, the median price of all homes is a whopping $1,069,000.
You can just imagine what houses might cost in some of the Silicon Valley towns like Mountain View or Palo Alto, or just over the Golden Gate Bridge in Marin County.
The Bottom of the List
While the above chart shows the 22 U.S. cities with the most $1 million homes, LendingTree also listed the major cities in the country with the fewest.
Buffalo, located in upstate New York, takes this title, with only 0.10% of homes passing the mark and an overall median home price of just $141,000. So, to buy the average home in San Jose, you’d need to sell off about eight average houses in Buffalo.
The other cities with the smallest concentrations of million dollar homes are also located in the Great Lakes and Midwest regions: Pittsburgh (0.17%), Hartford (0.18%), Cleveland (0.19%), and Indianapolis (0.27%).
Markets
3 Reasons Why AI Enthusiasm Differs from the Dot-Com Bubble
Valuations are much lower than they were during the dot-com bubble, but what else sets the current AI enthusiasm apart?
3 Reasons Why AI Enthusiasm Differs from the Dot-Com Bubble
Artificial intelligence, like the internet during the dot-com bubble, is getting a lot of attention these days. In the second quarter of 2023, 177 S&P 500 companies mentioned “AI” during their earnings call, nearly triple the five-year average.
Not only that, companies that mentioned “AI” saw their stock price rise 13.3% from December 2022 to September 2023, compared to 1.5% for those that didn’t.
In this graphic from New York Life Investments, we look at current market conditions to find out if AI could be the next dot-com bubble.
Comparing the Dot-Com Bubble to Today
In the late 1990s, frenzied optimism for internet-related stocks led to a rapid rise in valuations and an eventual market crash in the early 2000s. By the time the market hit rock bottom, the tech-heavy Nasdaq 100 Index had dropped 82% from its peak.
The growing enthusiasm for AI has some concerned that it could be the next dot-com bubble. But here are three reasons that the current environment is different.
1. Valuations Are Lower
Stock valuations are much lower than they were at the peak of the dot-com bubble. For example, the forward price-to-earnings ratio of the Nasdaq 100 is significantly lower than it was in 2000.
| Date | Forward P/E Ratio |
|---|---|
| March 2000 | 60.1x |
| November 2023 | 26.4x |
Lower valuations are an indication that investors are putting more emphasis on earnings and stocks are less at risk of being overvalued.
2. Investors Are More Hesitant
During the dot-com bubble, flows to equity funds increased by 76% from 1999 to 2000.
| Year | Combined ETF and Mutual Fund Flows to Equity Funds |
|---|---|
| 1997 | $231B |
| 1998 | $163B |
| 1999 | $200B |
| 2000 | $352B |
| 2001 | $63B |
| 2002 | $14B |
Source: Investment Company Institute
In contrast, equity fund flows have been negative in 2022 and 2023.
| Year | Combined ETF and Mutual Fund Flows to Equity Funds |
|---|---|
| 2021 | $295B |
| 2022 | -$54B |
| 2023* | -$137B |
Source: Investment Company Institute
*2023 data is from January to September.
Based on fund flows, investors appear hesitant of stocks, rather than overly exuberant.
3. Companies Are More Established
Leading up to the internet bubble, the number of technology IPOs increased substantially.
| Year | Number of Technology IPOs | Median Age |
|---|---|---|
| 1997 | 174 | 8 |
| 1998 | 113 | 7 |
| 1999 | 370 | 4 |
| 2000 | 261 | 5 |
| 2001 | 24 | 9 |
| 2002 | 20 | 9 |
Many of these companies were relatively new and, at the peak of the bubble in 2000, only 14% of them were profitable.
In recent years, there have been far fewer tech IPOs as companies wait for more positive market conditions. And those that have gone public, the median age is much higher.
| Year | Number of Technology IPOs | Median Age |
|---|---|---|
| 2020 | 48 | 12 |
| 2021 | 126 | 12 |
| 2022 | 6 | 15 |
Ultimately, many of the companies benefitting from AI are established companies that are already publicly traded. New, unproven companies are much less common in public markets.
Navigating Modern Tech Amid Dot-Com Bubble Worries
Valuations, equity flows, and the shortage of tech IPOs all suggest that AI is different than the dot-com bubble.
However, risk is still present in the market. For instance, only 33% of tech companies that went public in 2022 were profitable. Investors can help manage their risk by keeping a diversified portfolio rather than choosing individual stocks.
Explore more insights from New York Life Investments.
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