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NicolasMcComber/Getty Images September 30, 2022 Jeff Ostrowski covers mortgages and the housing market. Before joining Bankrate in 2020, he wrote about real estate and the economy for the Palm Beach Post and the South Florida Business Journal. Troy Segal is Bankrate's Senior Homeownership Editor, focusing on everything from upkeep and maintenance to building equity and enhancing value. Bankrate logo The Bankrate promise
At Bankrate we strive to help you make smarter financial decisions. While we adhere to strict editorial integrity, this post may contain references to products from our partners. Here's an explanation for how we make money. Bankrate logo The Bankrate promise
Founded in 1976, Bankrate has a long track record of helping people make smart financial choices. We’ve maintained this reputation for over four decades by demystifying the financial decision-making process and giving people confidence in which actions to take next. Bankrate follows a strict , so you can trust that we’re putting your interests first. All of our content is authored by and edited by , who ensure everything we publish is objective, accurate and trustworthy. Buying or selling a home is one of the biggest financial decisions an individual will ever make. Our real estate reporters and editors focus on educating consumers about this life-changing transaction and how to navigate the complex and ever-changing housing market. From finding an agent to closing and beyond, our goal is to help you feel confident that you're making the best, and smartest, real estate deal possible. Bankrate logo Editorial integrity
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Bankrate’s editorial team writes on behalf of YOU – the reader. Our goal is to give you the best advice to help you make smart personal finance decisions. We follow strict guidelines to ensure that our editorial content is not influenced by advertisers. Our editorial team receives no direct compensation from advertisers, and our content is thoroughly fact-checked to ensure accuracy. So, whether you’re reading an article or a review, you can trust that you’re getting credible and dependable information. Bankrate logo How we make money
You have money questions. Bankrate has answers. Our experts have been helping you master your money for over four decades. We continually strive to provide consumers with the expert advice and tools needed to succeed throughout life’s financial journey. Bankrate follows a strict , so you can trust that our content is honest and accurate. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions. The content created by our editorial staff is objective, factual, and not influenced by our advertisers. We’re transparent about how we are able to bring quality content, competitive rates, and useful tools to you by explaining how we make money. Bankrate.com is an independent, advertising-supported publisher and comparison service. We are compensated in exchange for placement of sponsored products and, services, or by you clicking on certain links posted on our site. Therefore, this compensation may impact how, where and in what order products appear within listing categories. Other factors, such as our own proprietary website rules and whether a product is offered in your area or at your self-selected credit score range can also impact how and where products appear on this site. While we strive to provide a wide range offers, Bankrate does not include information about every financial or credit product or service. The U.S. housing market finally is , but longtime homeowners have reaped the rewards of robust price gains since the Great Recession. In some of the nation’s most expensive housing markets, even average homeowners are sitting on million-dollar properties. These fortunate homeowners don’t possess vast estates or multi-storied . They’re just owners of otherwise-ordinary homes that happen to be located in places with scarce land and high wages. The most dramatic run-ups in real estate prices have come – not surprisingly – in Northern California. That region has experienced a combination of strong wage growth and . Median home prices in Silicon Valley and San Francisco rose by $1 million from mid-2012 to mid-2022, according to a Bankrate analysis of National Association of Realtors (NAR) data. Homeowners in Southern and also have experienced hefty appreciation. The 5 priciest metro areas in the U S
Here’s a look at the nation’s most expensive housing markets and the way they’ve appreciated in the last decade, based on current and historic . The median price of an existing single-family home sold during the second quarter of 2022 eclipsed $1 million in four of those five markets. San Jose California
Median price mid-2012 $660,000 Median price mid-2022 $1.9 million Ten-year gain $1.24 million Percentage gain 188 percent San Francisco
Median price mid-2012 $552,600 Median price mid-2022 $1.55 million Ten-year gain $997,400 Percentage gain 180 percent Anaheim California
Median price mid-2012 $542,000 Median price mid-2022 $1.3 million Ten-year gain $758,000 Percentage gain 140 percent Honolulu
Median price mid-2012 $629,700 Median price mid-2022 $1.1 million Ten-year gain $515,300 Percentage gain 82 percent San Diego
Median price mid-2012 $379,100 Median price mid-2022 $965,900 Ten-year gain $586,800 Percentage gain 155 percent The median price is the statistical midpoint – half of homes sold for more, half sold for less. So in these markets, even owners of modest homes possess properties worth $1 million. But how much do you actually make
Of course, owning a $1 million home doesn’t necessarily mean you can sell and walk away with $1 million. Most homeowners need mortgages to buy, and repayment of those loans is the first thing that comes out of any . And if they refinanced or took cash out of their homes in recent years, their actual equity in the home could be much less than the magical seven-figure mark. What s driving the gap in home prices
The home prices in the most expensive markets are eye-popping precisely because they’re so high compared to other parts of the country. Median home prices are less than $280,000 in such major metropolitan areas as Buffalo, Cincinnati, Cleveland, Detroit and St. Louis. That huge gap is partly a function of a quirk of housing economics — the fact that real estate markets are localized and self-contained. “Housing is an immovable good. A house in San Francisco can’t be moved to somewhere else,” says Mark Fleming, chief economist for title insurer First American. In contrast, “there’s a national price for an iPhone, because it’s a movable good.” The for development also plays into local home prices. So do local wages. “The value or the price is in large part a function of incomes in the area,” Fleming says. “Prices are different because incomes are very different.” For example, median family income in Silicon Valley for 2022 is $168,500, according to Department of Housing and Urban Development data. In San Francisco, it’s $163,800. The typical family in Buffalo, by contrast, makes $87,700. In Cleveland, the figure is $85,400. Do pricey markets appreciate more
The markets that have been minting millionaire homeowners carry a major caveat: All are jaw-droppingly unaffordable. Anaheim, San Diego, San Francisco and San Jose rank as four of the five in the nation, according to the National Association of Home Builders/Wells Fargo Housing Opportunity Index. But the huge price gains in those places over the past decade illustrate that perhaps it makes sense to stretch the budget in an expensive area. By contrast, some of the offer homeowners less in the way of wealth-building. In the Cleveland metro area, for example, the median home price of $103,900 looked quite reasonable back in mid-2012. A decade later, Cleveland’s median home price is $225,000. The 117 percent increase is respectable, but dollar-wise, the $121,000 gain is just a fraction of the appreciation experienced in the priciest markets. However, it’s possible that the outsized price appreciation in coastal housing markets is slowing. The rise of remote work means those toiling in the tech industry can keep their Silicon Valley paychecks while living in more affordable areas. Fleming points to an exodus of homeowners from Northern California to places such as Boise, Idaho, and . The emigration of the Californians has caused intense inflation in those housing markets. In Boise, for example, median prices soared 278 percent in the past decade. In Austin, prices have risen 185 percent. “You might get faster price appreciation in the less expensive markets,” Fleming says, “because demand is leaving the expensive markets.” SHARE: Jeff Ostrowski covers mortgages and the housing market. Before joining Bankrate in 2020, he wrote about real estate and the economy for the Palm Beach Post and the South Florida Business Journal. Troy Segal is Bankrate's Senior Homeownership Editor, focusing on everything from upkeep and maintenance to building equity and enhancing value. Related Articles