Looking For An Affordable Luxury Home? Try The Rust Belt, Not San Francisco

There are just seven major metros where a luxury home costs less than $1 million, according to a report from Redfin RDFN. 

Five years ago, there were 30 major metros where prospective buyers could snap up a luxury home for less than seven figures. Now, as home prices hit all-time highs, the possibilities have shrunk by more than half.

Redfin defines a luxury home as one in the top 5% of its respective metro area based on prices over a 12-month period. 

Don't Miss:

• Peter Thiel turned $1,700 into $5 billion—now accredited investors are eyeing this software company with similar breakout potential. Learn how you can invest with $1,000 at just $0.30/share.
• Invest early in CancerVax's breakthrough tech aiming to disrupt a $231B market. Back a bold new approach to cancer treatment with high-growth potential.

Buyers hunting for a deal should look at the markets in Detroit, Cleveland, Pittsburgh, Indianapolis, St. Louis, Cincinnati, and San Antonio. Detroit is the most affordable option, with the median luxury home price sitting at $753,851, while San Antonio is the most expensive, with a median price of $957,854. 

Notably, the three most affordable metros for luxury homes— Detroit, Cleveland, and Pittsburgh— are also the three most affordable homebuying metros overall. The report found these three cities had the lowest median home prices in the U.S. in April, at $195,000, $235,000, and $250,000, respectively. 

"The Rust Belt's relative affordability has preserved opportunities for luxury buyers that have all but disappeared in much of the country," Redfin Senior Economist Sheharyar Bokhari said. "These metros haven't seen as much explosive investor demand or speculative buying, which has helped keep prices grounded. Buyers can get historic charm, large lots, and upscale finishes—often in walkable, tree-lined neighborhoods—for a small fraction of what a similar home would cost in cities like San Francisco or New York." 

Trending: Tired of Grid Failures and Charging Deserts? This Startup Has a Solar Fix and $25M+ in Sales — Now Raising at $3/Share

For buyers with a little more cash, there are five metro areas with median luxury home prices at or around the $5 million mark. San Francisco is the most expensive at $6,092,801, followed closely by San Jose at $5,508,743. Anaheim, Miami, and New York round out the most expensive metros in the country.

"The pandemic buying spree accelerated home price growth across all tiers—including the luxury bracket," the report said, while noting that the number of metros with luxury homes under $1 million had started falling in 2018.

Over the last decade, West Palm Beach, Florida has seen the biggest growth in luxury home prices, up 207.6%, while New York has seen the smallest growth at just 33.4%. 

Read Next:

• Maximize saving for your retirement and cut down on taxes: Schedule your free call with a financial advisor to start your financial journey – no cost, no obligation. 
• Arrived Home's Private Credit Fund’s has historically paid an annualized dividend yield of 8.1%*, which provides access to a pool of short-term loans backed by residential real estate with just a $100 minimum.