Despite the region’s reputation as an affordable place to live, skyrocketing growth in home prices means the Philadelphia area is rapidly gaining million-dollar homes.
The number of homes worth $1 million or more in and around Philadelphia has almost quadrupled over the last five years.
The Philadelphia metropolitan area had roughly 30,300 homes that were valued at $1 million or more as of July, according to a Zillow analysis. That’s up 288% since July 2020.
Strong homebuyer demand, a shortage of homes for sale, rising construction costs, and rapid home appreciation help explain the surge.
Home values overall in the metro area grew about 46% from the start of the pandemic to early 2025.
“A perfect cocktail of lower mortgage rates, higher savings, and a growing desire for space drove housing demand to new heights during the pandemic,” Orphe Divounguy, senior economist at Zillow, said in a statement. “Just about every major market experienced price growth far above what they’d become accustomed to, resetting the financial bar for home ownership.”
The luxury market
The multiple listing service Bright MLS defines luxury homes as ones with prices in the top 5% of the market. In the Philadelphia metro area, the threshold for luxury homes was $1.075 million this spring.
That threshold was almost 9% higher this year than last. Luxury home prices rose faster than prices in the overall market.
That’s largely because the region doesn’t have enough luxury homes to meet demand.
The supply of luxury homes for sale this spring was “especially tight” in the region compared to other markets in the Mid-Atlantic, according to Bright MLS. Both supply and the number of luxury listings hitting the market were down from the same time last year.
Rising costs and strong competition
Rising construction costs and elevated mortgage interest rates mean homebuyers’ money doesn’t go as far as it once did.
A survey through the National Association of Home Builders found that the average cost of materials has increased 42% since just before the pandemic.
That increase can take a newly built home that might have cost in the mid-$600,000s or $700,000s a few years ago and get it up to almost $1 million, said homebuilder Andrew Kaye, a past president of both the Pennsylvania Builders Association and the Home Builders Association of Bucks & Montgomery Counties. Rising labor costs and government regulations further raise the cost of construction, he said.
“Years ago, $3 million in Bucks or Montgomery County, and you were living on a giant estate in a 8,500-square-foot house,” Kaye said. “That’s not the case anymore. Now you’re living on, you know, a half an acre with a 3,800-square-foot house. It’s crazy.”
Stephanie Biello, associate broker at Kurfiss Sotheby’s International Realty and a past president of the Greater Philadelphia Association of Realtors, also said this phenomenon is happening among existing homes for sale because across the collar counties, there aren’t enough available homes for luxury buyers.
“They’re bidding $50,000 over asking,” said Biello, who is based in Bucks County but also works in Montgomery and Philadelphia Counties. “If you’re starting at $950,000, you could go well over a million.”
What $1 million+ buys
Compared to other parts of the country, the Philadelphia region is a pretty good place to buy a mansion, which Zillow defines as a home with at least 5,000 square feet of finished living space, for less than $1 million.
But many homes that cost more than a million dollars have less square footage.
In the city, the median size of a home worth at least $1 million was 2,629 square feet as of July. That’s slightly bigger than five years ago — by roughly 230 square feet.
Homes in this segment of the market had the same median number of bedrooms and bathrooms as they did five years ago — three.
Across the Philadelphia metropolitan region, however, homes in this price range have gotten smaller. They spanned a median of 3,424 square feet as of July. That’s 834 square feet fewer than five years ago.
Compared to five years ago, homes worth at least $1 million still had a median of four bedrooms but three bathrooms, one fewer than in 2020.
What luxury buyers want
Buyers who plan to spend $1 million or more are often looking for space, privacy, extra bedrooms for home offices and visitors, and state-of-the-art kitchens, Biello said.
Newly constructed homes are popular. Smart-home technology is a plus.
In the city, parking is key. In the collar counties, buyers want pools or space to build pools.