Million Dollar Homes Across America 2012

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

In the wake of the U.S. housing crisis, consumer confidence and home values fell sharply, while prices in some cities are less than half of what they were in 2007. In many local markets, however, such as in New York; San Francisco; Anchorage, Alaska; and Omaha, Neb., people on the front lines are optimistic about a recovery in sales volumes, prices and buyer confidence.

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 it may fetch a more moderate home. Although in most markets, homes in the $1 million range are not typical, they provide a good reference point for spending across the country as well as the health of local economies.

CNBC.com surveyed real estate agents in 18 U.S. cities to gain individual perspectives on the health of America’s local real estate markets. The following slides include example homes from each market valued between $1 million and $1.25 million that are either currently for sale or recently sold. The participants in the survey offered a front-line perspective on how local markets are performing compared to last year, how the dynamics are changing, and what buyers and sellers are asking when buying a home.

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

By Paul ToscanoPosted 29 May 2012

Listing price: $1 million
Bedrooms: 4
Bathrooms: 6
Size of home: 5,629 sq ft

Local perspective:
“Last year, the high-end market was dead, and it has picked up tremendously from this time in 2011,” says Deb Cizek of the Cizek Group. According to Cizek, homes valued above $1 million are among the hottest properties in the city, and aggressively priced homes can sell in as little as 30 days, while homes without significant reductions may remain on the market for 120 days or more before being sold.

Cizek says that most home buyers in Omaha are relocating or upgrading from a previous home, with a noticeable lack of first-time buyers. She maintains a positive outlook for prices and buying activity through the end of the summer.

Listing price: $999,999
Bedrooms: 2
Bathrooms: 1 full, 1 half
Size of home: N/A

Local perspective:
“The real estate market in Manhattan is much more vigorous than it was a year ago,” says Kelly Robinson of TOWN Residential. “A lot of people feel like they missed the bottom of the market, and it has created a sense of urgency.” According to Robinson, sale prices in the luxury market rose by 8.7 percent per square foot, with the average sales price of luxury homes in Manhattan standing just under $5.6 million in the first quarter of 2012.

The city real estate market is fueled by confidence and increasing rental prices, says Robinson, and the luxury segment for homes priced above $5 million is where the most robust buying activity is focused. That’s because of a limited inventory in this segment and a pool of willing buyers waiting to enter.

Robinson says she has seen a significant increase in activity and number of bidding wars for properties and is expecting strong second-quarter numbers, especially in the luxury sector. New York has seen a variety of buyers, from first-time homeowners frustrated with the high price of renting to foreign investors and native residents looking to relocate.

She says that in New York, buyers are concerned about a home’s price per square foot but also have a variety of questions when purchasing, including the financial condition of the building itself, number of owner-occupied units on the property and restrictions on lifestyle and usability of the property, such as whether the owner is allowed to have pets, sublet the apartment or whether the property can be purchased for a child.

Listing price: $1,099,000
Bedrooms: 3
Bathrooms: 2 full, 1 half
Size of home: 1,846 sq ft

Local perspective:
Although listing for $1,099,000, the home featured here ended with a final sale price of $1,170,000, according to the broker involved. This upward bidding reflects strength in the San Francisco market, and compared to last year the city is “seeing more buyer confidence, more buyers, considerably less inventory and a more cautious lending environment, with no real appraisal issues,” says Mark Best of Coldwell Banker Residential Brokerage.

Homes priced in the $1 million range sell slower than entry-level homes priced up to $800,000, says Best, but are selling faster than homes priced above $2 million. However, San Francisco is one of the U.S. cities where homes are selling the fastest.Best sees this trend continuing to improve from last year. He believes that one of the biggest challenges to the market will be to reduce inventory, but sales are helped by low interest rates and a positive jobs outlook.

Listing price: $1,250,000
Bedrooms: 4
Bathrooms: 2 full, 1 half
Size of home/lot: 2,574 sq ft / 5,998 sq ft

Local perspective:
Home prices are up 10 percent on Oahu, the island where Honolulu is located, says Patti Nakagawa of Coldwell Banker Pacific Properties, although sales have dropped slightly since last year. She says this is a result of low inventory, multiple offers on existing properties and qualified homebuyers waiting for new homes to come to market. In Honolulu, homes selling for more than $1 million take much longer to sell, with about an 11 month inventory waiting to be sold.

Nakagawa anticipates a strong overall market for 2012. She points out that the Hawaii property market has the benefit of a large number of second homes, with buyers from the mainland looking to snatch up vacation properties.

Listing price: $1,095,000
Bedrooms: 5
Bathrooms: 4 full, 2 half
Size of home: 6,000 sq ft

Local perspective:
Shea Zimmerman of Harry Norman Realtors Buckhead Northwest says: “There is definitely a change in the market and all for good. Sales are up between 8 percent and 10 percent in our market area.” She says that homes priced in the $1 million to $3 million range are selling much faster than those in higher price ranges, and the area benefits from a light inventory, cutting the average time a house will spend on the market nearly in half from this time in 2011.

Zimmerman’s outlook for Atlanta is increasingly positive. She says increased activity this spring began earlier than normal, a trend she expects to see through the second quarter. Most buyers are relocating or upgrading, she says, and most of their questions are in regard to quality of the neighborhood, instead of price.

Listing price: $1,180,000
Bedrooms: 5
Bathrooms: 5
Size of home: 4,175 sq ft

Local perspective:
According to Zillow, the Phoenix market hit a bottomduring the third quarter of 2011, and is expected to have some of the strongest price growth in the country through March 2013. However, homes in the Phoenix area priced above $1 million are “struggling more than lower price points, due to buyer difficulty in obtaining financing,” says Bonny Holland of KW Luxury Homes. She points out that in some areas of the city, $1 million homes are selling much faster this year than in 2011, due to low inventory.

Holland is optimistic, citing low inventories, low interest rates and increased activity. She says that some brokers in Phoenix believe the area is in a seller’s market for the first time in four years. Activity has been bouyed by investors, she says, while most normal buyers are looking to time the market before jumping in on any price point.

Listing price: $1,200,000
Bedrooms: 4
Bathrooms: 3 full, 1 half
Size of home/lot: 6,052 sq ft / 104,043 sq ft

In Alaska’s largest city, real estate prices are still coming down but are slowly stabilizing and are comparable to 2011 levels, says Mike Mulneaux of Real Estate Brokers of Alaska. For homes priced $1 million and up, Mulneaux estimates that they remain on the market for 90 to 120 days before being sold, on par with 2011. Most activity is by first-time buyers, although there has been an uptick in relocations, with a substantial amount of buyers interested in short sales and foreclosures, according to Mulneaux.

Listing price: $1,225,000
Bedrooms: 4
Bathrooms: 4 full, 2 half
Size of home: 5,700 sq ft

Local perspective:
According to Kathy Hall of Hasson Company Realtors, the Portland market is “vastly different” from a year ago. In the first half of 2011, she says, listings were getting low traffic and few offers were made because buyers expected prices to continue to fall. This spring, however, Hall has had a significantly higher number of showings and multiple offers. She says that many buyers waiting to time the market have seen homes they wanted sold to other buyers.

She says that million-dollar homes are taking longer to sell because there are fewer qualified buyers in the price range and because of difficulties obtaining jumbo financing. However, she sees market time dropping compared to a year ago, with lower priced homes closer to downtown accelerating the trend. “In my opinion, it appears that prices overall are becoming more stable,” she says. “Even with lower inventory, I am not seeing prices on the rise. I don’t think that consumer confidence is necessarily better, but more the fact that many people are tired of being in limbo and ready to get more settled for the long term.”

Listing price: $1,250,000
Bedrooms: 2
Bathrooms: 2 full, 1 half
Size of home: 1,826 sq ft

Local perspective:
“Our market is much stronger,” says Kristen Foote of Prudential Fox and Roach. “Consumer confidence is up, and we are seeing more buyers on the market, while inventory is lower. For the first time in 4 years I have been involved in bidding wars — it is a seller's market now. Inventory is going quickly and getting very close to asking price.”

Foote says that activity has already been picking up in 2012, and although short sales are still in the market, the low inventories are pushing homes to sell faster. Although demand for those relocating to Philadelphia is relatively weak, buyers looking in the $1 million to $1.5 million range are purchasing new construction condominiums as second homes, says Foote.

Listing price: $1,100,000
Bedrooms: 5
Bathrooms: 4 full, 1 half
Size of home: 5,229 sq ft

Local perspective:
“The Denver market has significantly improved. Inventory of resale homes is the lowest in 10 years and sales have increased almost 25 percent from the same period last year,” says Larry Hotz of All Denver Real Estate. In addition, homes in Denver are selling 13 percent faster than a year ago, while luxury homes are selling better than they have since 2005, says Hotz. Although he expects the improvements in the market to be “choppy” for the foreseeable future, he says sales are likely to continue as long as interest rates remain low.

Some dynamics of the market are also changing. Although first-time home buyers have made up a significant portion of the market for the past two years, the segment has slowed and is being replaced with move-up and relocation buyers.

Listing price: $1,090,000
Bedrooms: 2
Bathrooms: 2 full, 1 half
Size of home: 1,752 sq ft

Local perspective:
“The market has been interesting,” says Pat Cohen of Baird & Warner. “Buyers with cash are getting good deals. That being said, there are a lot more buyers in the market and even cash sales have tended to be competitive.” Cohen says homes in the $1 million range sell much slower than those at lower price points because consumers have found difficulty securing jumbo mortgages. However, she says the low interest rate environment and the expectation that higher rates are on the horizon have induced buyers to purchase homes faster than last year. She also sees many second home purchases, while buyers are concerned about the amount of foreclosures in their prospective apartment buildings.

Listing price: $1,050,000
Bedrooms: 5
Bathrooms: 3 full, 1 half
Size of home: 3,356 sq ft

Local perspective:
2011 was a relatively stable year, and 2012 has started out stronger, says Mark Lippolt of Hammond Residential Real Estate. “The current market is characterized by low interest rates, a new influx of buyers who are competing with each other for multiple offers and spot inventory shortages in select price points and communities.” He points out that high quality homes are selling in all price categories, often with multiple offers, which has been a trend in the area only in the past several months. “The closer a million-dollar home is to the core downtown Boston employment centers in finance, health care and higher education, the faster and easier the sale,” he says.

According to the Greater Boston Association of Realtors, the average time on market for single-family homes in March was 131 days and for condos 118. In both categories, time on market is down from last year. With relatively strong demand and stable home values, Lippolt says, most buyers are concerned with the quality of local public schools, and there is a high correlation between home price appreciation and school quality in the suburbs.

Listing price: $1,195,000
Bedrooms: 3
Bathrooms: 3
Size of home: 3,034 sq ft

Local perspective:
Brokers have seen a significant pickup in activity this year compared to 2011. “We have seen a huge increase in buyers, whether it be locals upgrading to bigger homes or people from out of town buying a second home,” says Martin Buras of NOLA Realty LLC. Buras says that at his firm, homes listed in the $1 million range are selling faster than those in other price ranges, with 15 homes in April either sold or under contract within 60 days of going to market.

With the city still emerging from the effects of Hurricane Katrina in 2005, Buras is optimistic. “We have a lot of economic development going on in and around the city which is attracting professionals into the area,” he says, adding that there has been a relatively even mix of first-time home buyers, relocators and those taking advantage of low interest rates to upgrade into bigger homes.

Listing price: $1,100,000
Bedrooms: 3
Bathrooms: 4
Size of home: 4,175 sq ft

Local perspective:
In 2011, the Las Vegas market was dominated by bank-owned properties and short sales, but legislation in Nevada has changed the dynamics of the market, says Robyn Yates of Windermere Real Estate. The legislation effectively slowed foreclosuresby requiring a lender to demonstrate that they hold the certain documentation to begin the process of foreclosure. “This has caused a shortage of inventory available for buyers, says Yates. “Our inventory last year was between 12,000 to 15,000 units available at all times. We are now down to 5,000 units available. This shortage in inventory has caused multiple offers on existing homes, and prices are increasing.”

Las Vegas is still feeling the pain of the real estate bust, with homes once worth $1 million going for $500,000 or less, but this has opened opportunities for buyers looking to snag a deal. “The market will continue to move as long as we have inventory,” says Yates, “Las Vegas may become a seller’s market soon.”

Listing price: $1,148,000
Bedrooms: 4
Bathrooms: 2.75
Size of home/lot: 3,560 sq ft / 9,300 sq ft

Local perspective:
“The market in Seattle has done a complete flip-flop from a year ago,” says Dave Danforth of Coldwell Banker Danforth. “We are seeing multi-offer situations on well-priced homes in most price ranges. It currently is a seller’s market in Seattle with the lack of inventory that is available to qualified buyers.”

Danforth sees homes priced above $1 million taking approximately twice as long to sell than lower-priced homes, although that’s still an improvement over last year. He estimates that Seattle has an inventory of a relatively low 2.6 months, an indication of a healthy housing market. In the Seattle area, “Amazon is expanding, Microsoft and Boeing are hiring, and builders are starting to build new construction again. All indications are that for the foreseeable future our market should be very strong,” says Danforth.

Listing price: $1,029,900
Bedrooms: 3
Bathrooms: 2 full, 1 half
Size of home: 2,900 sq ft

Local perspective:
In the heart of St. Louis, pending and sold units were up approximately 2 percent by the end of the first quarter, with inventory down 9 percent, according to Kathy Beilein of Laura McCarthy Realtors. For homes priced above $1 million, average time on the market decreased from 236 days in 2011 to 173 days in 2012, while at prices below $700,000 time on the market has increased year over year.

Beilein sees the market for first-time buyers as strong, while “sellers who are looking to scale down are finally feeling more comfortable with placing their homes on the market, believing that prices are stabilizing.”

Listing price: $1,590,000
Bedrooms: 3
Bathrooms: 5 full, 2 half
Size of home: 5,438 sq ft

Local perspective:
In Houston, single-family home sales for 2012 are up 6 percent as of March, compared to a year ago, while the inventory for has dropped by 21 percent, according to Toni Nelson of Prudential Gary Green Realtors. Nelson says homes selling for more than $1 million have actually been on an upward trajectory for several years, although there is still a 12.8 month inventory for this segment, compared with a 5.6 month inventory for homes in the average ($227,270) price range.

Houston has benefited from steady job growth in energy, the international shipping port and the medical industry, which has added to consumer confidence and has helped lead to 10 months of sales growth, says Nelson. With a strong baseline in the housing market, Nelson says that the most common question asked by buyers is about the surrounding school district and the community, instead of home prices and deals.

Listing price: $1,095,000
Bedrooms: 2
Bathrooms: 1 full, 1 half
Size of home: 1,512 sq ft

Local perspective:
Los Angeles was identified as a housing market that has hit bottom in a recent study by Zillow, which predicts that the L.A. market will rise about 1 percent in the next year. The city’s rental index is up 4 percent so far this year, while home values over the period are down 5.4 percent, signaling an upward trend in home prices in the future.

In the million-dollar market, Rob Aigner, CEO of Keller Williams Beverly Hills, has seen “more velocity, more multiples and more volume” compared to a year ago, with prospective buyers mostly concerned with pricing and financing.