Number of Areas With Luxury Homes Under $1 Million Collapses
Newsweek AI is in beta. Translations may contain inaccuracies—please refer to the original content.
The number of U.S. metropolitan areas where buyers can purchase a luxury home for less than $1 million has shrunk from 30 in 2020 to only seven today, according to a new Redfin report, as home prices have skyrocketed over the past five years.
Redfin defines luxury homes as those in the top 5 percent of their respective metro area by value, based on a rolling 12-month period.
Why It Matters
A chronic lack of inventory across the U.S. has driven up prices in both the traditional housing market and the luxury market, especially after low interest rates during the pandemic sparked a nationwide homebuying frenzy.
The annual price of a single-family home in the U.S. luxury marketplace grew by 7.6 percent between 2023 and 2024, twice the rate of the traditional market at 3 percent, according to the Coldwell Banker Global Luxury program's 2025 Trend Report.
Luxury condo prices grew by 6.5 percent in the same time frame, compared to 3 percent in the traditional market. Since 2020, according to Redfin, the median sale price of a U.S. luxury home has gone up by a staggering 88 percent.
For those unconstrained by higher costs, the recent surge in luxury home prices might not have made a difference, but for aspirational luxury buyers, the recent price hike has made a difference between purchasing their dream home or having to delay their plans.
According to a recent report by Redfin, pending sales of luxury homes collapsed to the lowest level in a decade in April, as volatility in the financial markets added uncertainty to wealthy peoples' investments.
What To Know
The typical price of a U.S. luxury home was $1,348,065 in April, according to Redfin data, up 6.5 percent from a year earlier, but down slightly from the record high set in March.
There are only seven major U.S. metros where buyers can find luxury homes for less than $1 million. These are, in order of affordability:
Detroit, Michigan: $753,851 Cleveland, Ohio: $757,046 Pittsburgh, Pennsylvania: $846,715 Indianapolis, Indiana: $914,276 St. Louis, Missouri: $914,276 Cincinnati, Ohio: $931,145 San Antonio, Texas: $957,854
Despite currently having the most affordable luxury homes in the country, prices in these cities still surged significantly over the past five years.
In 2020, the median sale price of a luxury home was $532,706 in Detroit (up 81 percent); $531,461 in Cleveland (up 59 percent); $618,837 in Pittsburgh (up 53.2 percent); $616,613 in Indianapolis (up 65.3 percent); $677,578 in St. Louis (up 51.9 percent); $600,709 in Cincinnati (up 70.2 percent); and $656,438 in San Antonio (up 68.7 percent).
A home listed for $10 million sits on a lot on April 18, 2024, in Miami.
A home listed for $10 million sits on a lot on April 18, 2024, in Miami.Detroit, Cleveland and Pittsburgh were also the most affordable homebuying metro markets overall, with the median sale price of a typical home in these cities at $195,000, $235,000 and $250,000 respectively in April.
What People Are Saying
Redfin senior economist Sheharyar Bokhari said in a news report: "The Rust Belt's relative affordability has preserved opportunities for luxury buyers that have all but disappeared in much of the country.
"These metros haven't seen as much explosive investor demand or speculative buying, which has helped keep prices grounded. Buyers can get historic charm, large lots, and upscale finishes—often in walkable, tree-lined neighborhoods—for a small fraction of what a similar home would cost in cities like San Francisco or New York."
What Happens Next
In April, the luxury market suffered the biggest decline in pending home sales, at -9.9 percent year-over-year, since August 2023, according to Redfin. Bokhari said "many luxury buyers are adopting a wait-and-see approach because of volatility across financial markets and shifting tariff policies."
But growing inventory in the luxury market is also starting to shift its dynamics toward buyers. In April, the number of luxury homes on the market jumped by 7 percent compared to a year earlier, the highest supply since 2021.
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