Multiplying million-dollar cities

Plus, So much for home court advantage + 4%, Oh My

͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌  February 19, 2022 | Issue #30

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Good morning! This week we're talking about out-of-town buyers, the impact of rising mortgage rates and sneaky ways some agents make listings look too good to be true. First — seven-figure cities. Multiplying million-dollar cities Money; Getty Images A new analysis from Zillow found there are now 481 U.S. cities where the typical home is worth $1 million or more. Thanks to a roughly 20% jump in home prices nationwide, these are 146 more "million-dollar cities" this year than last. Pre-pandemic there were just 285 such locations, and if prices continue to rise at the current rate, another 49 cities could cross the seven-figure threshold by the middle of 2022. The current list is still dominated by the usual suspects.   California claims 200-plus spots, more than any other state. The New York and San Francisco metropolitan areas host 76 of these pricey cities each. The most expensive city in the country is Indian Creek, Florida with a typical home value of $28.3 million. The island near Miami has just 88 residents — reportedly including Tom Brady and Gisele Bündchen, as well as Ivanka Trump and Jared Kushner. More telling perhaps, are the states seeing their first cities crack list. Idaho, Montana and Tennessee each saw cities top $1 million for the first time last year — a sign, Zillow economist Jeff Tucker says, that "the geography of wealth in the U.S. has begun to shift." Save On Utility Bills and Increase Your Home's Safety and Curb Appeal by Purchasing Replacement Windows Presented by  With weather unpredictable as ever these days, modern windows provide better insulation so that neither your heating or cooling systems need to work overtime, helping to keep energy bills down. Installing new windows also provides an extra measure of security against intrusions, protection against weather, and could increase your home's value. 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In Philadelphia, that means out-of-towners were prepared to spend an average of $559,200 on their new homes while locals were budgeting $435,600. As a New Yorker who has lived in Philly — and still enjoys perusing the city's charming rowhouses — it amazes me to see how much farther my housing dollars could go there. My experience tells me this gap is inevitable, and the data shows why.   A previous report from the brokerage showed New Yorkers (many newly emboldened by remote work) were more likely to move to Philly than any other city last year. The median sale price in Philadelphia is $255,000 — less than a third of New York's $785,000, according to Redfin. To assemble its ranking, Redfin looked at the maximum price parameters used by home searchers. Don't worry, I'm not single handedly skewing the numbers with my scrolling. Only cities with at least 3,000 searchers from both inside and outside the metro area in 2021 were considered. For more: Rich Out-of-Town Buyers Are Making It Hard for Locals to Afford Homes in Their Own Cities 4%, oh my Money; Getty Images The newcomer advantage can clearly create a big problem for locals. However, it's just one reason homes are becoming less affordable. Another, more widespread challenge? Rising mortgage rates. The average rate on a 30-year fixed-rate mortgage increased to 3.92% this week, according to Freddie Mac. That's up from 3.22% at the start of January and the highest average in almost two years. Money A buyer with a monthly housing budget of $2,000 lost an estimated $13,750 in buying power when rates rose from 3.5% (roughly where rates were two weeks ago) to 3.9%. This means that instead of being able to buy a $396,000 home, that buyer is now able to afford a $382,250 home. For more: Homeownership Drifts Further Out of Reach as Mortgage Rates Climb Tricks of the trade? We all know people who post shined-up versions of their real lives on social media. It's pretty much the same for agents listing houses. Some of the tactics they use are well-known and largely accepted: a smartly-placed mirror to highlight a space's natural light, a wide-angle lens that allows a photographer to capture a whole room — and also make it look a bit larger than it really is. An article from The Guardian this week, however, exposes some less savory — and harder to spot — tricks. For example, it's one thing to add a virtual couch and rug to demonstrate how a place might look furnished, it's another to virtually add a non-existent backyard. Unfortunately, the problem extends beyond the digital. Inexperienced (or downright shady) home flippers have been known to use cheap materials that make a home look of-the-moment, but that might not last through move-in day. One telling-trend according to The Guardian? A big modern tub inside a glass-walled shower. My feeling: 👎. Happy hunting, P.S. Share your stories of misleading listings with me on Twitter @samsharf or via email at sam.sharf@money.com. P.P.S. Have a friend who loves real estate or is looking for a home of their own? Please forward them this e-mail or send them to the Money Moves subscription page. Money's Essential Home Buying Resources: Winter 2022 On the hunt? Check out Money's Mortgage Calculator, see The Best Mortgage Lenders and look at the latest mortgage rates Thinking of refinancing? Our list of The Best Mortgage Refinance Companies can help. You can also use our Mortgage Refinance Calculator or these refi tips Key question: How much house can I afford?

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