When one thinks about a hectic (but profitable) real estate market, with lots of transactions, and a finite supply for a seemingly endless demand that makes real estate prices go absurd… that person probably has New York City as a role model.
But guess what? That’s a trap. We’re not saying NYC is a piece of cake, its prices are super affordable, and anyone can buy a luxurious real estate there – but just like there are some home types home buyers often overlook, there are cities that common sense think of as expensive and are not nearly as expensive as other cities that are often overlooked.
Don’t believe us? Here are some cities that are more expensive than NYC:
Let’s talk about criteria when it comes to the most expensive real estate in the US.
What’s the difference between Average Home Price and Median Home Price?
It wouldn’t be correct to search for the most expensive real estate in the country and pin it on the city because while one expensive property can skew the prices up a bit, it doesn’t always mean all properties’ prices will instantly become higher. The nature of fair market value is the accordance of a home buyer with a home seller and vice-versa. If someone is willing to spend $30 billion dollars on a house in Luxury City-USA it doesn’t mean that everyone else will. It only means that someone with a lot of money believes that house is worth that much.
So understand that when we talk about cities that have more expensive real estate than New York, we are talking about the real estate “market” behavior when it comes to house prices and not the extreme cases.
There are two ways to go about studying the market behavior. You can either list it through the prism of an average home price or a median home price. They seem like synonyms but are different concepts: while the former is the basic idea of average you learned in school – where the average is found when you add 2 (or more) values and divide them by 2 (or how many values there were) – the median home price is different. Imagine you have 3 homes sold: one for 1k, the other for 5k and the other for 74k; the median home price is the 5k, while the average home price would be 26k. Median home price is basically finding the home price that’s nested in the middle, and we believe it’s the best way to assert the most expensive real estate in the US because, like we said, one crazy guy might have agreed to pay $30 billion for a home and completely skew the city’s average home price.
So keep in mind that, while one or two cities might not have as expensive homes on the high end of the spectrum, the low-end the Big Apple (and its regulations that aim to keep the low-income population from succumbing to gentrification) evens things out. So, our method to get to these cities was getting New York’s median price for a single-family home – $386,000; are you surprised? – and comparing it with other cities.
Phew! That was a long explanation. Let’s get to what everyone is waiting for: the most expensive real estate in the US.
San Jose, California
San Jose is not only the most expensive real estate in California; it’s actually *the* most expensive real estate in the US! The whole metropolitan area of San Jose-Sunnyvale-Santa Clara has the absurd median price of a single-family home going for something like $1,070,000! One million, seventy thousand dollars! That’s almost $700,000 more expensive than New York; how about that?
And why is San Jose the most expensive real estate in California and the USA, you ask?
Two words: Silicon Valley.
San Jose is basically its “capital”. Adobe’s headquarters is there. Paypal’s too. And eBay’s. Cisco Systems and a bunch of other small startups that grow up to become the next big thing. With such a large concentration of high-technology engineering companies – which usually attracts high-skilled workers with high salaries – the economical growth that San Jose has been enjoying has been massive, and real estate, of course, have picked up on it. The so-called “tech bubble” keeps on inflating and that’s how it reached this bizarre number of 1 million and seventy thousand dollars, making San Jose the most expensive real estate in California ahead of much more known cities like Los Angeles, San Francisco, and even San Diego. In the long run, though, should the tech bubble burst, the aforementioned cities have more going on and might relegate San Jose back, but it is what it is and San Jose is the most expensive real estate in the US.
Yes! Boulder is one awesome city we don’t talk about enough. You want to know how cool Boulder is? It was named the happiest place in the US. But sorry to burst the bubble of happiness: happy is expensive. Boulder’s median home price is a whopping $548,400! Whoa, Boulder…
Want more concrete arguments to understand why Boulder has some of the most expensive real estate in the US? Well… it’s just 30 minutes from Denver, in the foothills of the Colorado Rockies with jarringly beautiful mountains to hike during the summer and spring, and ski during the winter. Great education with the University of Colorado Boulder and a big number of Science Institutes, and a very progressive economy.
In the case of Boulder, we believe this price is only going higher since the city has been cited in so many recent rankings of cities with a bright future in the next decades. Buying a home with one of our Agents in Boulder, Colorado can be a good investment. Who knows; it might even reach the San Jose standards.
The lovely Naples, Florida is also more expensive than New York City.
It’s easy to understand the inclusion of this Floridian gem. Off the coast of the Gulf of Mexico, Naples is home to affluent permanent residents but also to snowbirds and short-stay tourists. A much less populous city than San Jose, for instance, Naples is that perfect beach-golf-boating retreat with year-round good weather.
Seasoned Naples Real Estate Agents will add that aside from all those nice features, the city in itself has a historic economical tradition in real estate developments and agriculture due to its proximity to the Everglades and Ten Thousands Island, so it’s only natural that the median price of a single-family home there is a little higher than large multi-industries cities. By the way, if you’re wondering, $435,000 is the value – which is quite cheap for what the city offers, if you ask us.
Boston – NYC’s eternal “rival” – can rub that on Big Apple’s face. Well, if it’s a competition for who has the most expensive real estate in the US, that is…
Boston’s median home price is $414,200 dollars, but Real Estate Agents in Boston will argue that this the city makes that value seem cheap because there are a lot of high-paying jobs in the town and vicinities, and the city has a lot of cultural offerings and public services for its populations. And they’ll be right, after all, young people keep flocking to Boston; making it one of the best cities for singles.
Talking about “best cities”…
Kind of natural that Seattle, one city that was featured in our Best Cities to live in the US list, would be featured on this list of the most expensive real estate in the US, right? The best stuff is expensive!
Seattle Real Estate Agents seem to have no trouble selling properties on the Seattle-Tacoma-Bellevue area, though. Even with the salty median price of $422,100 dollars, families continue to go for this great city. However, different from NYC, Seattle has been dealing with severe homelessness issues due to the massive gentrification in great part brought upon the aforementioned tech bubble. An economic slowdown for Seattle is expected sometime soon, and – since New York has an interesting future ahead with Amazon choosing the city (together with Arlington, VA) as the place for their new headquarters – it might as well dip down behind New York soon. For more on that, check our 12 real estate trends for 2019 article.
It’s only fitting that Washington D.C. is on this list because, as the capital, the costs of living is pretty high. A dollar is worth 0.75 cents in D.C. and that’s without taking into consideration the continuous rising housing costs.
To most young professionals, while they do find it a bit difficult to adhere to the expensive living standards, millennials still move there. While expensive, the median house price in Washington doesn’t deter the growing numbers of residents. With costs at around $637,000, there are many things that attract people in Washington D.C. A booming economy, entire cities being renovated through a process of gentrification and decreasing crime rates are just some areas where D.C. wins people over. Real estate agents in Washington D.C. will tell you the same. Urban improvement does impact Washingtonians and not always in the best of ways, but it also improves the quality of life in the capital.
We’re curious about you now. After reading this article, did you get pumped to live in one of those cities because of how cool they look (or at least dream about that), or was it a soothing “hey, NYC is not that bad after all; it could be worse!”. Tell us in the comments!