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Million Dollar Homes Across America 2010

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Million Dollar Homes Across America

How much can $1 million buy you in today’s real estate market? The answer, of course, varies depending on where you’re looking to buy.

Throughout the US housing crisis, home values have fallen sharply and short sales are becoming commonplace. However, many in local real estate markets - from New York and San Francisco to Anchorage and Omaha – are optimistic about a gradual recovery in home prices.

One price range of particular interest is the $1 million market, where affordability and luxury come to a crossroads. In some places, $1 million may buy you a mansion, in others the price will fetch a nice, yet moderate home. Although these are not typical homes by any means, they provide a good point of reference for spending across the country as well as the health of local economies. For reference, we have also included information on the market for homes priced $1 million or greater, with information from Zillow.com.

CNBC.com surveyed 19 local markets across the country, gathering examples and individual perspectives on the health of local markets in America.

So, how far can $1 million go in today’s real estate market? Click ahead to find out!

By Paul Toscano
Posted 28 July 2010

New York, New York

Listing price: $1,000,000
Bedrooms: 2
Bathrooms: 2 full, 1 half
Size of home/lot: 1,350 / 1,688 sq ft

$1 million+ market*
Homes for sale: 3,217
Median size: 2,459 sq ft
Median time on market: 68 days

Local perspective:
In New York, activity has doubled in the first quarter from a year earlier, with 1,195 sales in Q1 2009 compared to 2,384 in Q1 2010, up due to buyers reentering the market and sellers getting their asking price. Inventories are down nearly 24%, and with increasing demand. Buyers are optimistic of increasing values over time.

Short sales are also occurring in New York, and this is where buyers are getting the best deals, according to realtors in the area. The current example is a short sale that was originally purchased in January 2008 for $1.45 million.

The outlook is “extremely positive” over the next 12 months, as prices are expected to adjust with high demand and shorter supply.

San Francisco, California

Listing price: $1,198,000
Bedrooms: 4
Bathrooms: 2 full, 1 half
Size of home/lot: 2,200 / 4,303 sq ft

$1 million+ market*
Homes for sale: 597
Median size: 2,297 sq ft
Median time on market: 48 days

Local perspective:
The San Francisco market has seen an up-tick in buying activity across all price ranges compared to 2009, partly as a result of the federal homebuyer tax credit, which expired in April. The market is seeing a “promising” recovery, although prices and activity are still not back to “normalcy.”

Entry-level homes currently represent the hottest segment of the market and this strength is expected to continue into 2011, although buyers continue to demand high affordability. Realtors expect the overall market to remain stable, although summer buying is expected to give a clearer outlook on the rest of the year.

Las Vegas, Nevada

Listing price: $1,200,000
Bedrooms: 4
Bathrooms: 5
Size of home/lot: 4,213 / 15,682 sq ft

$1 million+ market*
Homes for sale: 130
Median size: 5,947 sq ft
Median time on market: 94 days

Local perspective:
One of the cities hardest-hit by the subprime crisis, realtors in Las Vegas report only a flat increase in sales from 2009 to 2010, mostly due to the homebuyer tax credit.

Many sales in Las Vegas continue to be short sales, with approximately 80% of homeowners 'underwater', or owe more than their mortgage is worth. Short sales increased from 10% of total sales in January 2009 to 30% of sales in May 2010, and this number could continue to rise.

Supply of homes has dropped from approximately 22,000 in January 2009 to 12,000 in May 2010, with demand dropping at a similar pace. Although there has been a slight increase in prices of late, rising home values are possible in 2011, according to realtors in the area.

Anchorage, Alaska

Listing price: $1,100,000
Bedrooms: 5
Bathrooms: 4 full, 1 half
Size of home/lot: 6,190 / 48,021 sq ft

$1 million+ market*
Homes for sale: 74
Median size: 6,379 sq ft
Median time on market: 128 days

Local perspective:
As in the rest of the country, sales in Anchorage were bolstered by the first time home buyer tax credit, but have slowed significantly since the incentive has expired. As a result, first time buyers dominate the market, while short sales and foreclosures continue to increase.

Realtors in the area remain hopeful that the market will remain stable for the rest of the year and steadily increase over the next 12 months.

St. Louis, Missouri

Listing price: $1,145,000
Bedrooms: 4
Bathrooms: 3.5
Size of home/lot: 4,885 / 130,700 sq ft

$1 million+ market*
Homes for sale: 33
Median size: 7,064
Median time on market: 101 days

Local perspective:
Realtors in St. Louis report that the city’s central corridor has seen strong performance over the past year, up 23% in May from a year earlier. Although the federal homebuyer tax credit increased sales, the opinion is that buyers were simply moving their timetable for purchases forward to take advantage of the program, and that the market will give up some gains.

However, prices look to have stabilized in most price ranges, while residential, non-condo properties are on the market sell 12% faster than they did in 2009.

Phoenix, Arizona

Listing price: $1,147,000
Bedrooms: 6
Bathrooms: 5
Size of home: 5,800 sq ft

$1 million+ market*
Homes for sale: 342
Median size: 5,000 sq ft
Median time on market: 85 days

Local perspective:
In one of the harder-hit local markets, Phoenix’s $1 million properties offer you much more for the price. In the beginning of 2009, the average price per square foot was around $265, but it has dropped to approximately $229 today. Inventories of million dollar homes has decreased 30% from a year earlier, and analysts say a decrease in overall inventory points towards a stabilized market in the next 12 months.

Buyers in the area are concerned of further market decline and are “extremely price sensitive.” However, buyers with the patience to purchase short-sales and foreclosures can gain a great advantage.

Dallas, Texas

Listing price: $1,000,000
Bedrooms: 4
Bathrooms: 4 full, 1 half
Size of home/lot: 3,900 / 20,800 sq ft

$1 million+ market*
Homes for sale: 634
Median size: 5,361 sq ft
Median time on market: 93 days

Local perspective:
Like many US cities, Dallas has seen an increase in sales and more interested buyers in 2010. One major trend around the city is the purchase of homes that are “move-in ready,” instead of homes in need of remodeling. Realtors also report that tougher lending guidelines around jumbo loans have reduced interest in spending additional money to close a purchase with a 20% or greater down payment.

In addition, individuals with ”Mean Buyer” syndrome – buyers that have sold and are out to make up for their loss in the buying process – are numerous in Dallas and act to keep prices down.

Despite this, home prices in Dallas are stable and although prices may sink slightly before the end of the year, a surge may be on the horizon by Spring 2011, according to realtors in the area.

Minneapolis, Minnesota

Listing price: $1,088,000
Bedrooms: 4
Bathrooms: 3 full, 1 half
Size of home: 4,430 sq ft

$1 million+ market*
Homes for sale: 141
Median size: 4,248 sq ft
Median time on market: 73 days

Local perspective:
In Minneapolis, homes in the $1 million range are approximately 3% of the market. At the current levels, it is estimated that the inventory would be bought out after a period of about 33.7 months.

The local market has been one of the best performing in the country in the past 12 months, recently reporting an 11.6% increase in prices over that period.

Omaha, Nebraska

Listing price: $1,175,000
Bedrooms: 4
Bathrooms: 5
Size of home/lot: 6,552 / 28,500 sq ft

$1 million+ market*
Homes for sale: 21
Median size: 5,001 sq ft
Median time on market: 103 days

Local perspective:
Although realtors in Omaha report “very strong” sales numbers through 2009, the average sale price of homes sold in this period fell by about 15-20%. In addition, as the federal housing stimulus expired, the amount of completed transactions month-over-month dropped by nearly 65%.

Sales in Omaha mostly originated online, as buyers looked for deals and attempted to quickly close deals prior to the expiration of the home buyer tax credit.

Realtors expect the future to remain stable as long as rates remain very low, although many are bracing for the worst, with perceived unknowns in the job market. New loan restrictions and requirements also stand to potentially hinder activity, the realtors say.

Honolulu, Hawaii

Listing price: $1,098,000
Bedrooms: 4
Bathrooms: 4
Size of home/lot: 3,900 / 8,135 sq ft

$1 million+ market*
Homes for sale: 442
Median size: 2,929 sq ft
Median time on market: 84 days

Local perspective:
On the island of Oahu, real estate activity has significantly increased from 2009, with sales of single family homes up 40% and sales of condos up 48%. Prices are also on the rise, with values of single family homes up 3% and condos up 2% from last year.

In Honolulu, the federal home buyer tax credit has motivated buyers, reduced inventory and realtors report that the local market has become a sellers market, with multiple offers on many listings. This positive situation is also attributed to a healthy Hawaiian economy, low interest rates and strong international buying interest.

Charlotte, North Carolina

Listing price: $1,000,000
Bedrooms: 5
Bathrooms: 5 full, 1 half
Size of home/lot: 8,000 / 26,136 sq ft

$1 million+ market*
Homes for sale: 351
Median size: 5,692 sq ft
Median time on market: 60 days

Local perspective:
North and South Carolina have been well known as home-value safe havens. However, recent Case Schiller home values indicate that Charlotte has been the second-worst performing market in the country from one year earlier, dropping 2.8% from May 2009.

The trajectory for home values is on an upward trajectory and realtors are optimistic that Charlotte’s local market will have a lower bottom than the rest of the country, noting that the area has remained relatively stable throughout the housing crisis as homes already offered affordable pricing prior to the recession.

Cleveland, Ohio

Listing price: $1,295,000
Bedrooms: 5
Bathrooms: 5 full, 1 half
Size of home/lot: 5,398 / 16,960 sq ft

$1 million+ market*
Homes for sale: 3
Median size: 4,218 sq ft
Median time on market: 84 days

Local perspective:
The market in Cleveland has also seen increased activity compared to 2009. Brokers report that buyers are not feeling an urgency to purchase, as this is considered a buyers market . However, even in the high-end market, buyers are value-driven and sellers continue to face selling at a loss and may have to provide cash incentives to complete a sale.

Following an increase in sales, and seller fatigue, inventory has substantially decreased and home prices are beginning to stabilize in Cleveland.

Seattle, Washington

Listing price: $1,095,000
Bedrooms: 4
Bathrooms: 3 full, 1 half
Size of home/lot: 2,980 / 4,791 sq ft

$1 million+ market*
Homes for sale: 774
Median size: 3,170 sq ft
Median time on market: 73

Local perspective:
Compared to 2009, the Seattle market is up dramatically in 2010. Seattle has seen a 27.3% increase in closed sales as compared to the first 5 months of 2009, with the luxury market also seeing significantly improved performance. Whereas a $1 million listing would see little interest last year, an appropriately priced property will get a healthy amount of interest, according to the realtors.

Although the fallout from the expiration of the tax credit is still unknown, realtors in Seattle report an increase in sales and an increase in buyers, along every wealth class. They also see numerous indications that buyers are coming back to the market and expect a solid recovery in the next 12 months.

It is believed by brokers that the market has already it bottom, although this strongly depends on the amount of short sales and other distressed properties hitting the market.

Portland, Oregon

Listing price: $1,060,000
Bedrooms: 4
Bathrooms: 3 full, 1 half
Size of home/lot: 4,737 / 15,989 sq ft

$1 million+ market*
Homes for sale: 178
Median size: 4,596 sq ft
Median time on market: 75

Local perspective:

Sales in Portland have been significantly more robust, for all price ranges, in the first half of 2010 compared with the same period in 2009. However, the pace of sales has noticeably decreased since the home buyer tax credit expired.

Most buyers in Portland are relocating from another area of the country and are newly employed in the metro area. Realtors report that some families have sold their primary homes and are renting instead, waiting for the right property to surface, although many fear that they low-interest rate environment won’t last for long and are trying to time the market. Realtors report that many buyers are unnecessarily pessimistic about the health of the market.

Low interest rates and easier lending requirements are key to a housing recovery in Portland, and although the city has several pockets that are still struggling, the overall market looks to have stabilized.

Nashville, Tennessee

Listing price: $1,069,500
Bedrooms: 4
Bathrooms: 4 full, 2 half
Size of home/lot: 5,693 / 49,560 sq ft

$1 million+ market*
Homes for sale: 190
Median size: 5,738 sq ft
Median time on market: 96 days

Local perspective:
In Nashville, 2010 has seen an increased number of sales, but prices have remained flat. Although first time buyers were on the rise during the time the federal tax credits were available, that subset of buyers is now on the decline.

Buyers continue to look for value, and are currently looking to avoid flood zones after the recent and devastating flooding in the region. Activity is up in the market below the $500,000 range, while there is strong interest in foreclosures and short sales. Affordability in Nashville is very high – a boon for buyers. But there remains lagging demand resulting from buyers in other parts of the country , such as Florida and California , who are unable to sell their homes in those places, but are looking to move to this area.

As prices remain stable, realtors in the area continue to look for value as sellers remain reluctant to sell at a loss.

New Orleans, Louisiana

Listing price: $1,140,000
Bedrooms: 4
Bathrooms: 3 full, 1 half
Size of home/lot: 4,059 / 7,134 sq ft

$1 million+ market*
Homes for sale: 77
Median size: 5,074 sq ft
Median time on market: 75 days

Local perspective:
The inventory of $1 million homes has increased substantially in New Orleans over the past year, according to realtors in the area. They report that the market remains positive and more buyers continue to enter the market. In many of the most popular areas of the city, such as the Garden District, the French Quarter, and the Marigny and Warehouse districts, the outlook remains positive.

Los Angeles, California

Listing price: $1,049,000
Bedrooms: 4
Bathrooms: 2 full, 1 half
Size of home/lot: 3,090 / 3,108 sq ft

$1 million+ market*
Homes for sale: 2,462
Median size: 3,339 sq ft
Median time on market: 66 days

Local perspective:
In Los Angeles, realtors report a “much improved” market, where units sold are up, prices are down in the high end but entry-level properties are becoming more richly priced. More buyers are coming into the market, while first time buyers dominate the market and there is a strong demand for distressed sales.

In the high-end market, all-cash transactions are occurring and prices are beginning to stabilize as inventories shrink. However, the high-end properties remain stagant and could be susceptible to price fluctuations.

Boston, Massachusetts

Listing price: $1,099,000
Bedrooms: 2
Bathrooms: 2
Size of home/lot: 1,194 / 1,306 sq ft

$1 million+ market*
Homes for sale: 407
Median size: 2,350 sq ft
Median time on market: 106 days

Local perspective:
In Massachusetts, June was a strong month for home sales, as buyers picked up 5,726 single-family homes, which was the highest monthly number in four years. Realtors point to the first time homebuyer tax credit as being instrumental in getting the market moving, although they question whether the market can sustain its momentum.

The recently reported Case-Shiller numbers indicate that Boston home values rose 1.6% in May from April, and 4.8% from a year earlier.

Philadelphia, Pennsylvania

Listing price: $1,475,000
Bedrooms: 2
Bathrooms: 2
Size of home: 2,221 sq ft

$1 million+ market*
Homes for sale: 175
Median size: 3,068 sq ft
Median time on market: 89 days

Local perspective:
The peak for the Philadelphia market occurred in 2005, and although 2010 looks to be much better than 2009, realtors report that the market is “nowhere near the 2004-2008 years.”

Philadelphia has seen most buyers in the $250,000 - $600,000 range, and for the most part are 1st time buyers, or not selling a home to move up. The outlook over the next 12 months is of a slow recovery, with home prices reaching a "new normal" of being lower than in recent years.

The perception is that home prices will exist in a narrow range until inventories are reduced and the employment landscape improves.