Boston Area Claims the Third Spot for the Country’s Top Millionaire Households
Phoenix Marketing International, a financial research firm, has released the list of the cities in the United States with the most number of millionaires – and Boston is one of them. In fact, Greater Boston is in the third spot as one of the cities with the highest share of households with at least one million dollars in wealth.
Boston is one of the major metropolitan areas in the country that entered the top three. It has about 7.5 percent of the households in the region with $1 million worth of fortune. That percentage is equal to approximately 139,000 families in Greater Boston in 2016.
Across the nation, only San Francisco and Washington had a higher number of households with seven figures of wealth with 7.9 percent and 8.6 percent respectively.
How Were the Millionaires Counted?
According to Phoenix Marketing International, they considered the assets of the households in the cities that are deemed investable. These assets included investments like bonds, stocks, and personal retirement funds. They also checked cash as well as the cash value of the households’ insurance policies.
Meanwhile, those who were not included in the analysis were real estate owners who had retirement accounts that are sponsored by their employers, such as 401(k)s.
How Did Boston Enter the Third Spot?
According to Professor Steven Neil Kaplan, a professor at the University of Chicago Booth School of Business, the cities, such as Boston, have top paying industries in their area and these industries contributed to their high incomes.
For example, in Washington DC, money from the government helps support a lot of people, including lawyers and defense contractors. Meanwhile, in San Francisco, the technology firms bring a significant amount of wealth, especially in the Bay Area.
As for Boston, there are strong institutions for education, including the Massachusetts Institute of Technology (MIT) and Harvard University. As a result, there is a workforce in the city that is highly educated. Doctors and big financial service firms are also present in Boston. The metropolitan area covers the whole city as well as the eastern part of Massachusetts and some parts of New Hampshire. The geography is defined by the federal government.
Aside from the Boston area, there are also other parts of Massachusetts with the highest share of millionaire households. One is Cape Cod with 7.6 percent, and another is the Vineyard Haven with 7.4 percent.
Quite surprisingly, New York City ranked lower in the list even though it is considered as one of the places in the United States with wealthy people. According to Kaplan, New York is the most populated metro area in the country, which is why the final number of millionaires in the city is small.
What The Numbers Say about Boston’s Real Estate Market
Boston has been on every list of cities with the highest housing prices. It is true that there is low supply in the city and there is high demand, which affects the prices. However, another driver that pushes the prices upward is that there are plenty of people in Boston who can afford the expensive apartment units and studios.
Currently, Boston’s median list price in Downtown Boston is $972,100 while in Bay Village, it is $949,300. South End has a little less expensive average with $762,600. However, there are condos in the Boston area that cost a fortune, such as the one at Fort Point, which is priced $1.7 million and has two bedrooms. There are also studio apartments, particularly in Quincy that start at $2,100 per month.
Back in 2015, there were headlines about Boston that said people who did not make $100K could not afford the median rent in the city. While the rent has decreased over time, Boston is still one of the cities in the US with the highest median rents. Additionally, in the same year, the Commonwealth of Massachusetts ranked one of the top 10 states with the most number of millionaires per capita with 6.66% of millionaire households.
Two years later, from being number seven, Boston has even more millionaires as it jumped to the third spot. In the coming years, it is possible that the city will climb even higher in the list.