San Francisco added over 380 millionaires since 2001 based on home sales alone. Image credit: PropertyShark.
Real estate investments before the start of the 21st century have created a new group of millionaires, according to a new report by PropertyShark.
The report showcases more than 30 cities with the most homeowners that became millionaires just by buying a home sometime before 2001 for less than $1 million, and selling it after 2001 for more than $1 million. Many of the homeowners-turned-millionaires purchased in or near high-demand areas, such as Silicon Valley.
“With all the instability the real estate market went through before and after 2001, we were curious to see how many people managed to make the best of their situation and turn a sizable profit from selling their home,” said Robert Demeter, author of the study for PropertyShark, New York. “Turns out, a handful of people managed to sell their house for over $1 million after the turn of the century.”
“Millionaire” cities
Since 2001, San Francisco added 381 millionaires, based on home sales alone. Property Shark did not consider the homeowners’ financial status or wealth factors, focusing solely on real estate for its study.
Buyers in San Francisco benefited from waiting for the real estate market to recover after the dot-com bubble burst. Following the 2008 recession, the then-burgeoning tech scene kept the real estate market relatively stable.
“San Francisco beating Manhattan for the top spot was an interesting find,” said Mr. Demeter.
Manhattan added 335 millionaires since 2001 based on home sales alone. Image Credit: Douglas Elliman
The high number of millionaires in San Francisco is especially notable because its population is about half of Manhattan’s alone. Other “millionaire” cities in Silicon Valley include San Jose (119), Redwood City (48), San Mateo (40) and San Carlos (29).
In contrast to the Bay Area, New York is also more vertically developed and has more condos available.
A total of 335 and 281 homeowners in Manhattan and Brooklyn, respectively, became millionaires after selling their homes. Queens was further down the list, with 93 new millionaires.
Following closely behind Manhattan was Los Angeles with 280 homeowner millionaires. The affluent neighborhoods of Bel-Air, Venice Beach and Brentwood made for the best real estate investments.
“Some of the cities that ended up in the top 25 didn’t come as a surprise,” said Mr. Demeter. “However, the smaller ones adding the same number of millionaires as the large ones was quite a fascinating discovery.”
Chicago added less millionaire homeowners than a neighboring suburb.
While Washington, D.C. did not make the “millionaire” city list, surrounding cities in Maryland did. In a similar vein, Plainville, IL gained 78 millionaires to nearby Chicago’s 57.
Other cities making the list include San Diego, Phoenix, Denver and Miami.
Real estate investments
This newest analysis from PropertyShark shines a new light on the always-changing real estate market.
Recently, PropertyShark found residential communities in California, New York and Florida have the most-expensive ZIP codes in the United States based on real estate transactions closed in 2017.
According to PropertyShark, a real estate data provider, the most-expensive ZIP code in the U.S. goes to addresses with the 94027 ZIP code in Atherton, CA. The California ZIP code was ranked second-most expensive in 2016 with Long Island, NY’s Sagaponack, or 11962, coming in first place (see story).
PropertyShark also analyzed the most expensive ZIP codes in the country compared to where the country’s wealthiest people actually live. The data showed that high-income residents do not necessarily live in the most expensive places (see story).
“As far as what the future holds, becoming a millionaire by selling your home is influenced by how the market is performing and how high demand is where you live,” Mr. Demeter said.
“You can buy the right home at the right time and in the right market – and dismiss the possibility that someday you might sell it – but if the need arises and selling becomes an option, the market’s condition will determine if you’ll get a six-figure price for your home or not," he said.