May 18, 2024 - Real Estate

Two cities have entered Washington's million-dollar club

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

Demand for luxury homes in the DMV is rising, and has been for the last four years, DMV-based agent Adam Skrincosky says.

Why it matters: The D.C. metro is one of the top metros in the nation where typical home values are above $1 million, per a new Zillow report.

  • True luxury homes here start around $2 million.

For the last six to eight years, $800,000 to $1.2 million has been one of the most competitive price ranges in the DMV, the TTR Sotheby's International Realty vice president tells us.

State of play: More Washingtonians have embraced suburban living in search of more space, home offices and backyards.

  • The demand plus "higher-than-average incomes for many individuals and families locally" has spurred home values beyond the Beltway, Skrincosky says.
  • Two cities — Vienna and Middleburg — have entered Washington's million-dollar club since 2023.

The big picture: The number of U.S. million-dollar cities climbed from 491 to 550 in the last year partly because demand for homes outside of urban areas has grown since the pandemic, Stephanie Anton, president of the Corcoran Affiliate Network, tells Axios.

Between the lines: Wealthy people are the ones who can play in this market. People with cash don't have to worry about high mortgage rates.

What they're saying: "For affluent consumers, real estate isn't just a shelter decision," Anton says.

  • These people are motivated to buy a new home in the same way they're motivated to buy a new luxury handbag, Anton explains.
  • It's about signaling who you are, acquiring something unique and buying something because you're "worth it" or "worked hard for it," she says.

The other side: Florida, Texas and Delaware have fewer million-dollar cities than a year ago, per the report.

"Luxury tends to lead us out of difficult times," Anton says. After 2008, high-end home buyers were the first to make moves.

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