How Much Home $1 Million Buys

Brought to you by

 

 

Lacey Rose, 04.28.06

A million dollars was once a measure of immense wealth in the U.S. It was a sum attainable by only a few and could buy a hilltop mansion, a city penthouse or a waterfront manor.

Not anymore. Today, million-dollar bungalows or two-bedroom condos are more like it--at least, in highly sought-after American locales.

Most Americans still consider $1 million a large sum of money, regardless of what their real estate agents would have them believe--and well, they should. The problem is, in the hottest real estate markets, there seems to be an utter disconnect between property value and the buying power of a dollar.

The result? Million-dollar homes seem to be a dime a dozen these days. According to a Census Bureau survey published in 2005, the number of million-dollar, owner-occupied homes in this country has nearly doubled since 2000. In fact, this segment of the housing market has grown so large that the Census changed its top home-value category from "$500,000 or more" in 1990, to "$1 million or more" in 2000.

Topping that Census list was the state of California, with 4.1%--almost one out of every 25--of its homes priced at or above the $1 million mark. Both Connecticut and the District of Columbia had 3.3%, and Massachusetts and New York trailed closely behind with 2.2% and 2.1%, respectively. In New York, that figure may seen surprisingly low, but we're not even talking about apartments, because the figures exclude residences in multiunit buildings.

In downtown Manhattan, you can get a great one-bedroom for a million, says Sean Turner, a broker with high-end real estate agency Stribling and Associates. "A two-bedroom would be a little tough."

"If you're looking in prime neighborhoods like the West Village or TriBeCa, a million dollars will buy you a very nice one-bedroom," she adds. "But if you're looking in an off location (more of a neighborhood on the perimeter) you can get a two-bedroom for a million--a small two-bedroom."

Vacation hotspots and popular second-home locales have hardly been immune to the rapid price growth either.

Asked what you can buy in Park City, Utah, for $1 million, Wendy Harrison, a broker with Signature Group Real Estate there, chuckles. "Not much," she says.

"You'd have to come outside of the Park City area, anywhere between seven to ten miles to be at the million dollar mark," she explains. "Homes right now in that particular area start at about $1.7 million."

The good news: Not everyone has to fork over seven-plus figures to live grandly. Indeed, you can still get a bang for your (million) buck in desirable markets like Raleigh, N.C. or Shaker Heights, Ohio.

And then, of course, if you're willing to venture a little further afield and explore the less-hot locations, you may find you can get even more value for your dollar. Sure, this may mean smaller towns or longer commutes to a city--but what areas like Tallahassee, Fla., or Akron, Ohio lack in cachet, they may make up for in space and amenities. Not to mention price.