This home in Los Altos Hills, CA 94022 could be yours for $10.888 million. This year, 94022 ranks as... [+]
Three years into a national real estate recovery, home prices aren’t showing any signs of easing. That goes double for booming Silicon Valley and the Bay Area, where a voracious demand for any sort of real estate -- be it sad little studio rentals or palatial McMansions -- has driven up the entire market.
Northern California takes three of the the top 10 places on our list of America’s Most Expensive ZIP Codes this year, and six of the top 20, led by Atherton, Calif. 94027. The median home price in 94027 -- the most expensive ZIP code for three years running -- was $10.6 million over the summer. Last year, it was a little over $9 million. And while one might expect a $10 million house to linger on the market, given the relatively small pool of possible buyers, it won’t. On average, houses in Atherton sell in less than four months.
While Atherton is home to a slew of tech A-listers, including venture capitalist Tim Draper,
“In Atherton, unlike other areas, you get a large floor area. You have room for a dedicated theater or garage space for car collectors,” says Gullixson. “Obviously there’s a big connection here to tech, and we’re near the epicenter of the boom, but Atherton doesn’t necessarily have to rely on it.”
And apparently, there is no sign of business slowing down. Gullixson says that in the prime parts of Atherton, land is selling with competitive bids at $7 million or $8 million an acre.
Last year, New York City dominated this list, with six of the top 10 most expensive ZIPs in the country. This year, it got squeezed out by California, with only two New York ZIPs making it to the top 10.
Full List: The 500 Most Expensive ZIP Codes 2015
“The thing about the Bay Area is that the housing supply is ridiculously constrained. And in a town like Atherton, there are no condos,” says Michael Simonsen, chief executive of Sunnyvale, Calif.-based Altos Research, which crunched the numbers for this list. “Manhattan is unique. It’s a more diverse market.”
At the upper end, prices in Manhattan may be neck and neck with luxury markets in Colorado and California, but the city still has a better mix of housing inventory. It’s possible, for example, to find a studio apartment for $550,000 in Manhattan’s pricey SoHo neighborhood. In Atherton, by contrast, the least expensive listing we could find is a modest four-bedroom house with a $3.3 million asking price.
Ranking second in the nation is Sagaponack, NY 11962, which is located in Southampton, nearly 100 miles from New York City, but is easily accessible by helicopter, seaplane, bus or train, depending on one’s income. The median weighted listing price there over the 90-day period we examined was $7.4 million. Manhattan’s 10012, which includes apartments and townhouses in SoHo and Greenwich Village, is third with a median price of $7.3 million.
Methodology
Forbes has worked with the housing market data provider Altos Research on this list for several years. Our ranking is based on asking prices rather than closed sales. We believe the former is in many ways is a better barometer of the current market -- the sample size for sales prices is smaller and the data is older given the time it takes for transactions to close or become public.
Altos looked at prices of single-family homes and condos in 28,500 ZIPs (which covers 95 percent of the U.S. population), calculating a median, rolling average for the 90-day period ending Oct. 9. For each ZIP code, prices are weighted according to the mix of housing stock available in the market. For example, the prices in resort towns where condominiums are common are nudged down, even if single-family homes are priced highly. Co-ops are excluded, which may lower the median prices in ZIP codes in some of the wealthy neighborhoods around Manhattan’s Central Park.
Full List: The 500 Most Expensive ZIP Codes 2015
Gallery: Homes In America's 50 Most Expensive ZIP Codes
“These are not the actual averages,” says Simonsen. “The numbers are a blend, which we only do for this list. The property mix keeps some prices down.”
This proprietary analysis gives us a more accurate way to compare the median home prices in thousands of ZIP codes, which all have unique quirks.
If you kick at the list hard enough you’ll find some peculiarities. Some ZIP codes appear on the list twice -- such as Tiburon, Calif. (94920) and Belvedere, Calif. (also 94920) -- the two towns share the same code and a post office. Likewise, Coral Gables and Pinecrest, Fla. (33156), which also share the same ZIP.
Also, to get the most accurate picture of a market, Altos requires a sample size of at least 10 active listings. Some ZIPs don’t make it to the list because there simply isn’t enough inventory available. This was the case for Los Altos Hills, Calif., which had fewer than 10 homes listed when we compiled the list last year. This year, that ZIP (94022) was ranked the 11th most expensive in the country.
The Golden State, Indeed
Twelve of the 25 most expensive ZIP codes this year are in California, with the Los Angeles area accounting for five of them, led by Hidden Hills at No. 9. In the exclusive gated community that is home to Kim Kardashian and Kanye West, as well as Justin Bieber, the median listing price was $5.07 million over the 90-day period we examined.
Compared to New York City, buyers arguably get a lot more for their money on the West Coast. In Southern California, any house that costs more than $10 million is almost guaranteed to have a wine cellar, gym, screening room and a pool, which helps justify the astronomical price tags. In Manhattan, multimillion-dollar home buyers are often happy to have exposed brick and a washing machine; a new wave of luxury condos might include a parking garage, a shared fitness center and a communal wine cellar; for the upper crust, a Central Park view is as luxurious as it gets.
If it’s space buyers want, they do well in Colorado. Woody Creek 81656 ranks fourth on our list and Aspen 81611 ranks ninth. The median prices in these two areas were $7.02 million and $5 million respectively, and according to Aspen/Snowmass real estate broker, Mark Lewis, it’s shaping up to be a “very good year.”
“The recession is in the distant rearview mirror,” he says. As one might imagine, Lewis says most of the buyers of these properties are not year-round residents, and they largely come from the financial sector, most notably hedge fund managers.
Nationwide, while prices are not dropping, Simonsen says there is some evidence of inventory building up.
“Overall, prices were up modestly, which isn’t surprising since we’re coming off four strong years of price increases. Instead we’re seeing growing inventory rather than a continual explosion at the high-high-end.”
