As home prices continue to rise, it’s not unusual to see homes that might have been $700,000 to $800,000 a few years ago suddenly come in at a healthy $1 million or more — all over the country.
A new Trulia report analyzed home values nationally and found that the share of single-family homes with $1 million or more asking prices has grown 7.6 percent in the last year alone, and has doubled since 2012. Homes valued at $1 million or more now make up almost 4 percent of all the homes on the market.
“Over the past year, as prices continued to rise, the median home value in more than 100 neighborhoods crossed into $1 million territory,” Felipe Chacón, a housing economist for Trulia’s Housing Economics Research Team, said. “More than 3,000,000 U.S. homes are currently worth $1 million or more.”
Trulia took a look at these million dollar neighborhoods — where rising home values mean that the median home value in a neighborhood is more than $1 million. The report looked at 15,100 neighborhoods, and 838 of them now fit in that category.
But where are those neighborhoods? In short, the bulk of them are not in Texas, which probably is one of the reasons that despite a robust market, you’re still seeing the state as an attractive place to relocate.
About two-thirds of these neighborhoods are in California, where 29 percent of all neighborhoods fit the bill. In San Francisco alone, only 15 neighborhoods have median home values that are below seven figures.
But what about Texas? Houston leads the way with 7.6 percent of its neighborhoods having a median home value of $1 million or more. Dallas is second, with 3.6 percent — with one neighborhood that is 100 percent full of million dollar homes.
Austin comes in third with 1.5 percent, but it should be noted that out of all three cities, Austin was the only one to add a new neighborhood to the ranks in the last year.
“Among the 100 largest metro areas, three got their first million-dollar neighborhood in the past of year,” Chacón said. “In Austin, the median home value in Barton Creek increased to $1.02 million in October, up from $935,000 a year ago. Roughly a 30-minute drive from downtown Austin, homes in this area tend to be very large and relatively new.”
Karen Eubank, who writes the regular feature Monday Morning Millionaire for CandysDirt.com, said she’s not surprised that Dallas had enough neighborhoods to include — she sees how many seven figure abodes the area has every week.
“In general you can count on finding homes that are not only expensive but are what I call blog worthy in Preston Hollow and Bluffview,” she said. “I think our readers want to see something that really provides a wow factor. It’s not enough to just have a pricy home. it has to be architecturally significant, beautifully finished-out, with great design or staging and of course, flawless photography.”
In fact, $1 million to $2 million homes are getting pretty common in Dallas, Eubank said.
“The $1-2 million range is frankly a dime a dozen now in Dallas,” she said. “One million is something I seldom even look at. When I hunt for a Monday Morning Millionaire, I look at $2.5 million and up and I prefer over $4 million.”
“I want people to open up the Monday Morning Millionaire on Monday morning with their cup of coffee and settle in to see a fantasy home,” she added.
Pockets of Dallas where you can reliably find those million dollar homes are Bluffview, Lakewood, Highland Park, University Park, Preston Hollow, and Turtle Creek, Eubank said.
“I think Bluffview is in complete transition, with what’s happening around Love Field, Bluffview prices will just increase,” she added. “People who choose Dallas, say over Vaquero or Westlake — which have fantastic homes as well — want that large home on a decent amount of land, but they choose Dallas because they want to be near the city amenities, the Arts District, the trails. I think we see more of this with out-of-town buyers. They expect a city lifestyle but want that big beautiful home.”
And once you start looking at that buyer base for the pricier million dollar homes, Eubank said new rules begin to form.
“We have an amazing Monday Morning Millionaire buyer base — they will purchase a house for $4 or $5 million, then go in and spend $1 or $2 million more to put their stamp on it, then sell it in three years. Then the next buyer comes in and does it again.”
“It’s no surprise that some of the most overbuilt segments of the market are million dollar plus homes,” said Candy Evans, CandysDirt.com founder and publisher. “And when we hunt for real estate, we focus on the areas where those homes proliferate.”
“Why does everyone want to build luxury homes? Because profit is all about margins, and the more expensive the property, the bigger the margins,” she added.
And where should we look for the next potential million dollar neighborhoods in Dallas?
“As land values keep rising in the central core, peripheral neighborhoods like the Bird Streets, Little Forest Hills, and maybe even Casa Linda could see million dollar estate homes next.,” Evans said. ‘I mean, we already are seeing them in Midway Hollow where, seven years ago, you could grab a home for $250,000.”
“I wouldn’t be at all surprised to see a million dollar home or two penetrating these ‘outer rings’ in the next couple of years.”