The most expensive home for sale in Atherton, Calif., 94027, is a newly constructed, 12,500-square-foot mansion with an asking price of $22.8 million. Looking for something more modest? This Silicon Valley town might not be for you. The least expensive listing there right now has a price tag of $2.789 million. (Update: shortly after publication the price of most expensive listing in Atherton was reduced to $19.98 million, still the highest asking price in the ZIP.)
The median price of the 27 homes listed for sale in Atherton through October was $9.69 million, making 94027 the most expensive ZIP code in America, a title it previously held from 2013 through 2015 before slipping to third last year.
“Atherton is the epicenter of Silicon Valley money and it only has ultra-high end properties,” says Michael Simonsen of Altos Research, Forbes’ partner on this list. “There is no other mix there.” Atherton and neighboring Los Altos Hills 94022—No. 3 on our list—are zoned for at least one-acre lots, meaning even the bottom end of the few homes that actually come to market are very expensive.
Thanks to similarly low supply and seemingly endless demand from high-earning tech workers, two other Bay Areas ZIP codes also cracked the top 5: Palo Alto 94301 (No. 4) and Ross 94957 (No. 5).
With Los Angeles’ Beverly Hills 90210 at No. 8, California accounts for half of America’s 10 priciest ZIPs this year. Florida’s Manalapan 33462, a sliver of land off the coast of Palm Beach that topped the 2016 list, slips to No. 2 this year.
Meanwhile, New York City is looking a little less luxe-dominated this year. After taking five of the top 10 spots in 2016, the Big Apple only has two this year: the Upper East Side’s 10065 (No. 9) and Tribeca’s 10013 (No. 10). Median prices in most Manhattan ZIPs are down compared to a year ago, but Simonsen says this is not a case of the top coming down – rather more relatively less expensive housing stock has come on the market.
Nevertheless, in ZIPs across the country, tight inventory remains the big theme in 2017, with 12% fewer properties for sale today than in our 2016 analysis. The supply crunch has been most pronounced at the entry level, with homes at price points accessible to first time buyers moving fast. The problem could get worse in expensive markets if the tax bill recently passed by the House of Representatives becomes law, notes Simonsen.
The House plan would allow current homeowners to continue deducting up to $1 million in mortgage interest, while shrinking the deductible amount to $500,000 for new home purchases. Laws that advantage people who already own tend to lead to housing shortages, says Simonsen, pointing to California’s Proposition 13, which sets the assessed value for tax purposes of a home at the time of purchase and limits how much that value can increase annually. Studies have suggested the 1978 law increased the length of time people stay in their homes, limiting availability for home buyers. This, Simonsen argues, is at least part of why there are just 14 homes for sale in Palo Alto 94301, a city with a population of 67,000.
Nationwide homes are moving at about the same pace as they were a year ago, however in the 10 most expensive ZIP codes in the country, the average time a home spends on the market is up from four and a half months in 2016 to six months today. This could be a sign of softening at the ultra-high end. The slowdown is most pronounced in Manalapan 33462, where listing prices start at $3 million. Average days on market there now top 260, up from about 75 days last year. A Manalapan home known as Gemini has been for sale since April 2015, when it was the most expensive listing in America. It has since lost that title, but the owners are still seeking a whopping $165 million.
Behind the numbers
For our annual list of America’s Most Expensive ZIP Codes (full list here) Forbes works with Altos Research, a Mountain View, Calif.-based real estate research firm. Altos calculates the median list prices for more than 28,500 U.S. ZIP codes (covering 95% of the U.S. population) using asking prices for single-family homes and condominiums listed for sale. To account for any blips that might occur when an unusually high-priced property comes on the market, Altos used a rolling average for the 90-day period ending October 27. The goal is to provide a snapshot of current activity.
For each ZIP code, prices are weighted by the mix of property types in that market. So the median price will not reflect an individual home, but theoretically the middle of the market. This method also means a town rich in condos will not jump to the top because of one single-family home priced extra-high for its rarity. Also, co-ops are not included, which means we may be low-balling the median prices for some Manhattan neighborhood.
ZIP codes with fewer than ten homes on the market are not included, which this year eliminated at least one pricey ZIP code in Manhattan and one in Miami. Some ZIP codes appear multiple times because the postal code is shared by two or more towns with very different inventory mixes.
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