Minnesota Town Of 500 Now Sells ‘Starter’ Homes For Over $1 Million

When you look at housing in America, one key factor that experts consider is the cost of starter homes: smaller, more affordable properties ideal for first-time buyers. The price of these homes has exploded in some parts of the country, including right here in Minnesota.

According to Zillow, the average price of a starter home in the U.S. is $192,514, which they note is still attainable for many. However, there are now a record number of cities where a starter home costs more than $1 million.

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Zillow reports that just five years ago, there were only 85 cities in America where starter homes were priced above $1 million. Today, that number has jumped to a staggering 233 cities, and one of them is in Minnesota.

The Only Minnesota City With $1M+ Starter Homes

Minnetonka Beach, a small town on Lake Minnetonka with a population just over 500, is Minnesota's sole city on this pricey list. The average home price in Minnetonka Beach is a whopping $2,061,408.

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Zillow says the average starter home in Minnetonka Beach costs $1.08 million. The town is surrounded on three sides by Lake Minnetonka and features only about 228 homes, making it both exclusive and expensive. Over the years, it's been home to some of the wealthiest Minnesotans.

The Midwest's Million-Dollar Club

Minnesota isn't alone. Illinois, Michigan, Missouri, and Kansas each have one city where starter homes top the $1 million mark. Still, Minnetonka Beach is the only such place in Minnesota.

On a national scale, California dominates Zillow's list, with 113 cities where starter homes exceed $1 million. New York comes in second with 32 cities, followed by New Jersey, Florida, and Massachusetts to round out the top five.