Different places attract particular residents due to a variety of factors such as job opportunities, climate or lifestyle. Though an ultimate constraint is the cost of a home, some markets seem to draw more high-earning homebuyers than others. For instance, Zillow estimates that the median home value in San Francisco is approximately $1.37 million (as of February 2019). That would require not only enough savings to afford a down payment, but also a large enough income to cover the high monthly mortgage payments. In the following study, we look at data on the highest earners to find the places where they’re buying homes.
To determine the places where the wealthy are buying homes, we looked at the number of homebuyers earning at least $999,000 as a percent of all homebuyers in an area. We then ranked metro areas according to that percent of high-earning homebuyers. The Data and Methodology section below shows our data sources and how we analyzed it all to create our final rankings.
This is SmartAsset’s second annual study on where the wealthy are buying homes. Check out the 2018 version here.
Key Findings
- The Bay Area tops the ranks. The San Rafael and San Francisco metro areas in California top our list. In both of these areas, the highest earners make up approximately 2% of homebuyers. The San Jose metro area also does well, coming in tied at at No. 14.
- Metro areas with above-average wealthy homebuyers. The average income of wealthy homebuyers across the 82 cities we considered was about $2.57 million. But two metro areas stood out with average incomes of more than $10 million. The average wealthy homebuyer in the Riverside, California metro area made almost $11.30 million in 2017. The highest average by far was in the Kansas City, Missouri-Kansas metro area, where wealthy buyers had an average income of more than $36 million.
- California and Florida dominate the top 10. Our top 10 includes five cities in California and three cities from Florida. These two states also account for 13 of our top 25 cities.
1. San Rafael, CA
Wealthy homebuyers as a percentage of all homebuyers: 2.24%
Number of wealthy homebuyers: 47
Average income of wealthy homebuyers: $1.72 million
2. San Francisco-Redwood City-South San Francisco, CA
Wealthy homebuyers as a percentage of all homebuyers: 1.98%
Number of wealthy homebuyers: 181
Average income of wealthy homebuyers: $2.08 million
3. Naples-Immokalee-Marco Island, FL
Wealthy homebuyers as a percentage of all homebuyers: 1.79%
Number of wealthy homebuyers: 57
Average income of wealthy homebuyers: $2.15 million
4. Bridgeport-Stamford-Norwalk, CT
Wealthy homebuyers as a percentage of all homebuyers: 1.63%
Number of wealthy homebuyers: 126
Average income of wealthy homebuyers: $1.97 million
5. Los Angeles-Long Beach-Glendale, CA
Wealthy homebuyers as a percentage of all homebuyers: 1.35%
Number of wealthy homebuyers: 578
Average income of wealthy homebuyers: $2.14 million
6. New York-Jersey City-White Plains, NY-NJ
Wealthy homebuyers as a percentage of all homebuyers: 1.29%
Number of wealthy homebuyers: 874
Average income of wealthy homebuyers: $2.13
7. Anaheim-Santa Ana-Irvine, CA
Wealthy homebuyers as a percentage of all homebuyers: 1.10%
Number of wealthy homebuyers: 229
Average income of wealthy homebuyers: $2.03 million
8. West Palm Beach-Boca Raton-Delray Beach, FL
Wealthy homebuyers as a percentage of all homebuyers: 1.02%
Number of wealthy homebuyers: 116
Average income of wealthy homebuyers: $2.23 million
9. Miami-Miami Beach-Kendall, FL
Wealthy homebuyers as a percentage of all homebuyers: 1.01%
Number of wealthy homebuyers: 119
Average income of wealthy homebuyers: $2.47 million
10. Santa Maria-Santa Barbara, CA
Wealthy homebuyers as a percentage of all homebuyers: 0.90%
Number of wealthy homebuyers: 19
Average income of wealthy homebuyers: $2.33 million
Data and Methodology
To create our rankings, we analyzed data for 82 metro areas on the following two metrics:
- Total home purchases
- Total home purchases by households with an income of at least $999,000
We determined the places where the wealthy are buying homes by dividing the number of home purchases made by households with an income of at least $999,000 by the total number of home purchases. We calculated the result for each metro area. Then we used this number to create our final list by ranking the metro areas from highest to lowest.
For the purposes of this analysis, we only considered metro areas that had at least 10 wealthy homebuyers. Data for both metrics comes from the Consumer Financial Protection Bureau’s Home Mortgage Disclosure Act and is from 2017.
Tips for Buying a Home
- Don’t overspend. Homes are expensive to begin with, so taking out more mortgage than you can afford will only leave you with more debt. Before you even look at listings, you should know how much house you can afford. You can use the results as a guide to make sure you don’t overextend yourself.
- Talk with an expert. Buying a home is a big decision and it’s important to consider how it fits with the rest of your financial goals. To help you understand if now is the right time for you to buy, consider speaking with an expert. A financial advisor can walk you through your options and explain how a new house could impact the rest of your financial situation. To find an advisor near you, we recommend our free financial advisor matching tool. Just answer some questions about your situation and goals. The tool will connect you with up to three advisors near you who will help you do the rest.
Questions about our study? Contact us at press@smartasset.com
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