Pricey listings flock together in cities like San Francisco and San Jose; the low square footage factor.
In some parts of the country, $1 million buys a starter home.
Nationwide, 4.6% of homes are priced at $1 million and above, according to an analysis of home listings by real-estate website Trulia.
In San Francisco, a whopping 43.5% of listings are priced at $1 million and above. Fairfield County, Conn., ranks second, with 29.7% of homes listed over $1 million, followed by San Jose, Calif., with 25.7% of listings topping the million-dollar mark.
“In terms of million-dollar listings, there has been a huge, huge influx,” says Paul Ybarbo, an agent with Sotheby’s International Realty in San Francisco. “If you’re in a nice neighborhood and live in a nice building, it most likely will command a million-dollar price point.”
According to Trulia, San Francisco homes listed for roughly $1 million have a median size of 1,774 square feet, but can be much smaller. Mr. Ybarbo has a $1.15 million listing, currently under contract, for a one-bedroom apartment in Nob Hill that measures just over 1,000 square feet.
Do the million-dollar listings translate to million-dollar sales? Typically, homes that sold for more than $1 million made up 1% of total U.S. home sales for the past decade. Since mid-2013, that number has risen to 2% of all sales, says Sam Khater, deputy chief economist at CoreLogic, CLGX -1.27% which specializes in mortgage and real-estate information. He expects the percentage of million-dollar sales to continue increasing so long as the stock market continues to improve and interest rates remain low.
Mr. Khater points out that two of the top three locations for high-price listings—San Francisco and San Jose—have thriving tech industries. “That says a lot about the changing nature of the economy,” he says.
The spread between markets in the share of million-dollar listings is much larger than the spread in other home-price measures, like price per square foot, says Jed Kolko, chief economist and head of analytics at Trulia. “The prevalence of million-dollar listings shows how different the markets are at the extreme high end,” he says. “Million-dollar listings are 50 times more common on Long Island [New York] than in Rochester, even though the median price per square foot is only 2.5 times higher.”