May 18, 2024 - News

$1M+ homes are the norm in more Minnesota cities

A map showing the share of cities with typical home values above $1 million, by U.S. state. Hawaii has the largest share, at 25%. California is second at 21.8%, and New Jersey a distant third at 9.8%. States with the highest share of "$1m cities" tend to be in the West and Northeast.
Data: Zillow; Map: Erin Davis/Axios Visuals

Minnesota gained two "million-dollar cities" — Orono and Medicine Lake — over the past year, data shows.

Why it matters: Luxury real estate prices are rising nationwide, largely because the wealthy are best positioned to buy in a market with low inventory and high mortgage rates.

The big picture: Persistent demand for homes outside of urban areas is one reason some states are seeing an uptick in million-dollar cities, says Stephanie Anton, a president at The Corcoran Group, a national luxury real estate company.

State of play: The number of U.S. million-dollar cities climbed from 491 to 550 in the last year, according to a recent Zillow report.

  • The six total in Minnesota also include Minnetonka Beach, Woodland, Greenwood and Sunfish Lake, per Zillow.

What they're saying: Elsewhere, prices are rising in suburbs with lively food and drink scenes, such as Wayzata and Excelsior in the west metro and White Bear Lake and Stillwater to the east, local luxury broker Nick Leyendecker tells Axios.

By the numbers: Luxury home sales in the 16-county metro are rising after a slight dip from 2022 to 2023, according to Minneapolis Area Realtors data shared with Axios.

  • Closed home sales over $1 million rose over 16% in April compared to a year earlier, the data shows.

The bottom line: "For affluent consumers, real estate isn't just a shelter decision," says Anton, who compares their motivation to buy a new home with purchasing a designer handbag.

  • "It's about signaling who you are" and acquiring something unique.
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