Counties where the most expensive homes are built

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Rising house prices and rising interest rates have finally started to bring back the balance to the residential market this year. But as demand declines, the United States still has a significant need for new homes, which could create plenty of opportunities for homebuilders.

Housing supply is one of the main factors contributing to the increased competition for housing over the past two years. The United States suffered from a severe shortage of housing stock prior to COVID-19, and the pandemic sent available inventory to low records. With a rush of buyers on the market, the limited availability of homes has fueled competition and driven up prices.

Builders rushed to meet the need for new units. Housing permits and housing starts rebounded strongly after falling sharply at the start of the COVID-19 pandemic. And despite a recent decline, starts have been higher this year than at any time since before the Great Recession.

While the construction industry has seen high levels of activity, recent conditions have nonetheless been challenging. Inflation has increased the cost of building materials by 33% since the start of the pandemic, and supply chain challenges over the past two years have contributed to increased costs and project delays. Construction companies also have struggled to hire and retain laborand many have raised wages in an attempt to do so.

Additionally, the relative cost of building a new unit has increased over time. Three decades ago, the average construction cost per residential unit in 2021 dollars was $168,452. That figure today is $218,791. And notably, the cost of construction per unit has outpaced the rate of inflation during this period, increasing by around 7.6% in the last decade alone.

The rise in construction costs took place even as the construction of single-family homes fell. Over the past decade, the proportion of single-family homes has decreased by more than 13%. Because single-family construction tends to be more expensive than larger developments on a unit basis, this trend reinforces the fact that overall construction costs are on the rise.

Beyond the type of unit, a number of other factors can contribute to the cost of building residential units. Supplies, labor and other costs may vary depending on the region where construction is taking place. And market conditions or a jurisdiction’s policies can also impact whether new units are upscale or affordable, or how easily single or multi-family units can be added.

For this reason, the average construction cost per unit can vary significantly across the country. Hawaii is the most expensive state to build new units with an average value per licensed unit of $403,596, a product local regulations and the geography and remoteness of the islands from the mainland. But the second cost is Wyoming ($391,030 per unit), which presents different challenges, including a lack of home builders. Locally, many of the places with the highest new home costs are among the most expensive real estate markets in the United States, including the Bay Area and the affluent suburbs of New York.

The data used in this analysis comes from the US Census Bureau Building Permit Survey (2021), the latest data available. To determine where the most expensive homes are built, researchers from Construction site coverage calculated the average value of permits per authorized unit. Units allowed included both single and multi-unit structures. It is important to note that the value of the building permit does not reflect the ultimate market value of the unit, but rather the total value of all construction work for which the permit is issued.

To improve relevance, only counties with a population of at least 200,000 were included. Additionally, counties were grouped into cohorts based on population size: small (200,000 to 349,999), medium (350,000 to 749,999), and large (750,000 or more). Note: Only counties with complete data for 2021 were considered in this analysis.

Here are the counties where the most expensive homes are built.

Major counties where the most expensive homes are built

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15. Pima, AZ

  • Average unit value authorized: $279,120
  • Total value of authorized units: $1,753,991,844
  • Total number of units allowed: 6,284
  • Single-family units as a proportion of the total: 81.4%

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14. San Joaquin, California

  • Average unit value authorized: $291,070
  • Total value of authorized units: $1,277,507,042
  • Total number of units allowed: 4,389
  • Single-family units as a proportion of the total: 84.7%

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13. Erie, NY

  • Average unit value authorized: $306,682
  • Total value of authorized units: $413,407,110
  • Total number of units allowed: 1,348
  • Single-family units as a proportion of the total: 59.5%

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12. Macomb, Mich.

  • Average unit value authorized: $307,076
  • Total value of authorized units: $530,321,027
  • Total number of units allowed: 1,727
  • Single-family units as a proportion of the total: 72.8%

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11. Nassau, New York

  • Average unit value authorized: $316,904
  • Total value of authorized units: $432,573,679
  • Total number of units allowed: 1,365
  • Single-family units as a proportion of the total: 55.2%

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10. Palm Beach, Florida

  • Average unit value authorized: $321,470
  • Total value of authorized units: $2,523,859,005
  • Total number of units allowed: 7,851
  • Single-family units as a proportion of the total: 53.6%

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9. San Francisco, California

  • Average unit value authorized: $325,290
  • Total value of authorized units: $819,406,693
  • Total number of units allowed: 2,519
  • Single-family units as a proportion of the total: 1.3%

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8. Honolulu, Hawaii

  • Average unit value authorized: $325,696
  • Total value of authorized units: $468,350,350
  • Total number of units allowed: 1,438
  • Single-family units as a proportion of the total: 65.2%

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7.Wayne, Michigan

  • Average unit value authorized: $340,811
  • Total value of authorized units: $763,416,226
  • Total number of units allowed: 2,240
  • Single-family units as a proportion of the total: 49.1%

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6. DuPage, IL

  • Average unit value authorized: $343,556
  • Total value of authorized units: $533,886,282
  • Total number of units allowed: 1,554
  • Single-family units as a proportion of the total: 62.1%

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5. Cuyahoga, Ohio

  • Average unit value authorized: $356,725
  • Total value of authorized units: $279,672,077
  • Total number of units allowed: 784
  • Single-family units as a proportion of the total: 95.9%

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4. San Mateo, CA

  • Average unit value authorized: $406,705
  • Total value of authorized units: $771,112,297
  • Total number of units allowed: 1,896
  • Single-family units as a proportion of the total: 28.2%

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3. St. Louis, Missouri

  • Average unit value authorized: $416,004
  • Total value of authorized units: $430,147,731
  • Total number of units allowed: 1,034
  • Single-family units as a proportion of the total: 89.5%

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2. Fairfield, Connecticut

  • Average unit value authorized: $416,959
  • Total value of authorized units: $538,711,638
  • Total number of units allowed: 1,292
  • Single-family units as a proportion of the total: 55.3%

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1. Suffolk, New York

  • Average unit value authorized: $682,633
  • Total value of authorized units: $995,961,917
  • Total number of units allowed: 1,459
  • Single-family units as a proportion of the total: 86.2%

Detailed results and methodology

The data used in this analysis comes from the US Census Bureau Building Permit Survey (2021), the latest data available. To determine the locations where the most expensive homes are being built, Construction Coverage researchers calculated the average permit value per licensed unit. Units allowed included both single and multi-unit structures. It is important to note that the value of the building permit does not reflect the ultimate market value of the unit, but rather the total value of all construction work for which the permit is issued.

To improve relevance, only counties with a population of at least 200,000 were included. Additionally, counties were grouped into cohorts based on population size: small (200,000 to 349,999), medium (350,000 to 749,999), and large (750,000 or more). Note: Only counties with complete data for 2021 were considered in this analysis.

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