Increasing home prices aren’t a trend that just the middle and lower classes are experiencing—those in the million-dollar range are noticing, too. In fact, some of those that used to not have million-dollar price tags now do, according to research by Zillow.
Zillow examined the distribution of single-family home and condominium Zestimates across 29,991 different ZIP codes starting in 2007, considering areas with more than 10 percent of properties valued at 1 million or more to be a million-dollar area for the year. Compared to the national Zillow Home Value Index, which rests at $200,000, the average million-dollar ZIP had a Zillow Home Value Index of $900,584.
In 2007, there were 1,108 ZIP codes (3.77 percent of all examined) that were considered “million-dollar ZIPs". Though in 2014 that figure had decreased to 958 (3.26 percent), that number has now increased to 1,280 (4.35 percent) as of May of this year. .
Property values are a big factor in million-dollar ZIP codes, with many concentrated in coastal markets. According to Zillow, of the 346 ZIP codes that were considered million-dollar ZIPs, 114 (32.9 percent) are on the West Coast in Seattle, Washington; Portland, Oregon; San Francisco, California; San Jose, California; Los Angeles, California; and San Diego, California. On the East Coast, New York, New York; Boston, Massachusetts; Miami, Florida; and Washington, D.C. made up another 92 new million-dollar ZIPS (26.6 percent).
However, Zillow explained that this growth is furthering the divergence in affordability between costal and interior cities. “Tech hubs” are largely considered million-dollar ZIPs with San Francisco (74 percent) and San Jose (77 percent) leading the way leaving other coastal ZIP codes to catch up. Seattle, for an example of a tech hub, has almost doubled it’s million-dollar ZIP codes from 2007’s 19 ZIP codes to now 38, which is 24 percent of the areas total ZIP codes.
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