Million-Dollar ‘Starter Homes’ Now the Norm in 237 American Cities, an All-Time High
According to the analysis, about one half of cities with million-dollar starter homes were in California, with New York and New Jersey coming in second and third.
Typical starter homes are going for $1 million or more in more than 200 American cities as a housing shortage drives the price tag for homes to new highs.
A new Zillow analysis found that a typical “starter home,” defined as a home in the lowest third of home values in a region, were worth at least $1 million in 237 American cities. Five years ago this was only the case in 84 cities.
According to the analysis about one half — 117 — of all cities with million-dollar starter homes were in California, with New York and New Jersey coming in second and third.
The analysis also found that, among metro areas, the New York City metropolitan area had the most cities, 48, with starter homes going for more than a million dollars. The San Francisco metropolitan area and the Los Angeles metropolitan area were second and third with 44 and 35 cities respectively.
According to the analysis, areas with more restrictive building regulations tended to have more cities with million dollar starter homes. It also found that markets with more expensive starter homes tended to have lower homeownership rates.