The most expensive places to buy a house
From coast to coast, the housing market has had a record run as a shortage of supply pushes values higher. The nationwide median home price eclipsed $400,000 in May 2022, its first time above that mark, according to the National Association of Realtors.
In some of the country’s most exclusive housing markets, however, $400,000 would hardly be considered a down payment. Bankrate looked at city-by-city sales data compiled by ATTOM Data Solutions to identify the most expensive municipalities in the country, in the first quarter of 2022. Unsurprisingly, California markets dominate the ranking.
Top 10 Most Expensive Cities for Homebuyers
The list of most expensive places is dominated by small towns in California, with riverside enclaves on the East Coast also making their mark. Here are the top 10 cities overall, with the Q1 median price for each:
- Atherton, California: $10.05 million. This Silicon Valley town is the most expensive place in the United States to buy a home, by far. Prices soared nearly 43% between the first quarter of 2021 and the first quarter of 2022, according to ATTOM Data Solutions.
- Watermill, New York: $6.24 million. Prices in this Hamptons enclave have nearly doubled over the past year.
- Portola Valley, California: $5 million. Another municipality in Silicon Valley, this city has seen prices increase by 42% in one year.
- Boca Grande, Florida: $4.4 million. The housing market in this small Gulf Coast village is dominated by waterfront homes. The median price in this town near Fort Myers has more than doubled.
- Los Altos, California: $4.3 million. Also in Silicon Valley, prices have jumped 42% in one year.
- Rancho Santa Fe, California: $4.29 million. The highest-ranked participant in Southern California, this expensive suburb of San Diego saw a 57% appreciation.
- Newport Coast, California: $4.1 million. According to ATTOM, this prestigious Orange County location has seen prices soar 49% in one year.
- Sea Island, Georgia: $4.09 million. This small resort town on the Georgian coast has seen a 50% price hike.
- Medina, Washington: $3.8 million. In an anomaly among the top 10, this Seattle suburb was the only place that saw a drop in prices from Q1 2021 to Q1 2022.
- Bridgehampton, New York: $3.7 million. This Hamptons town offers more affordable homes than the nearby Watermill, but still ranks in our top 10.
Most Expensive Mid-Size Markets
The five most expensive places with populations of 50,000 to 500,000, with median prices in the first quarter:
- Palo Alto, California: $2.95 million. Continuing Silicon Valley’s dominance on the list, this tech-heavy city was No. 1, although prices only rose 10% in one year.
- Newport Beach, California: $2.64 million. Prices in this Southern California community have soared 26%.
- Cupertino, California: $2.38 million. The median selling price in this tech hub, known for housing Apple’s headquarters, has risen 18% over the past year.
- Danville, California: $2.08 million. This Northern California city isn’t in Silicon Valley, it’s inside Oakland.
- Redwood City, California: $2.01 million. Yet another Silicon Valley entrant, this city has seen 22% growth.
The most expensive large markets
The five most expensive places with a population of 500,000 or more, with median prices in the first quarter:
- Manhattan: $1.66 million. No surprise here: New York, and Manhattan in particular, has always been one of the most expensive real estate markets in the country. However, prices only increased by 10% compared to the previous year.
- San Francisco: $1.45 million. This is another moderate growth market – prices have increased by 9%.
- San Jose: $1.3 million. The fastest gainer among major cities, the capital of Silicon Valley saw a 21% price increase.
- Los Angeles: $1 million. Prices are only up 4%, but LA remains expensive, prohibitively expensive for Angelenos earning local wages. It is one of the least affordable places in the country.
- Brooklyn: $900,576. Still cheaper than Manhattan, but this New York borough’s reputation for affordable housing is fast fading.
Here is ATTOM’s full set of America’s 25 Most Expensive Real Estate Markets:
|2||water Mill||New York||1,679||$6,241,666||95.1%|
|6||Rancho Santa Fe||California||9,037||$4,288,500||57.4%|
|15||Corona Del Mar||California||12,394||$3,275,000||18.6%|
|21||Palo Alto||California||96 113||$2,950,000||10.2%|
Affordability tips for homebuyers
If you’re worried you’ll never be able to afford a home, don’t despair. There are strategies that can help buyers deal with this record market:
Shop for a mortgage
Rates are volatile right now and fees vary widely from lender to lender. Comparing at least three offers from competing lenders can save you thousands of dollars over the term of the mortgage.
Look for a low down payment loan
For borrowers struggling to afford a home, the monthly payment is just one hurdle. Another comes with a down payment. With a typical American home selling for around $400,000, making a standard 20% down payment means writing a check for $80,000. There is, however, a potential workaround in the form of mortgages backed by the Federal Housing Administration and the US Department of Veterans Affairs. FHA loans and VA loans have less onerous restrictions than conventional loans, if you qualify. FHA loans have a minimum 3.5% down payment and VA loans require no down payment.
Consider a repairman
Older homes can be a good compromise for buyers frustrated by lack of inventory and skyrocketing prices. In Bankrate’s survey earlier this year, 21% of respondents said they would try this tactic. Of course, buying a repairman means you’re taking on a project, and that brings uncertainty. No matter how careful you are in estimating your renovation budget, you can count on surprises, especially in a time when material costs are skyrocketing and construction labor is scarce. Renovation experts say you should plan for cost overruns in the range of 15-20% of your construction budget.
Consider a more affordable neighborhood
Many buyers are faced with the harsh reality that they cannot afford the area they really want. Some buyers decide to move away from the most difficult markets, such as those listed above. However, a number of major metropolitan areas are still showing affordable real estate prices. They include Buffalo (with a median selling price of $202,300 in the first quarter), Philadelphia ($297,900), Louisville ($235,400), St. Louis ($216,700), Kansas City ($287,400) and Milwaukee ($298,800).