Richard Florida is a co-founder and editor at large of CityLab and a senior editor at The Atlantic. He is a university professor in the University of Toronto’s School of Cities and Rotman School of Management, and a distinguished fellow at New York University’s Schack Institute of Real Estate and visiting fellow at Florida International University.
Ten percent of ZIP codes in the San Jose metro have median home values of more than $2 million.
When the housing market crashed in 2007, it was hard to imagine that, less than a decade later, home prices would return to and exceed these already stratospheric levels in some of the country’s most expensive neighborhoods. In June, a three-unit penthouse at the Ritz-Carlton, Battery Park became New York City's most expensive listing—at a nearly surreal $118.5 million, or about $7,600 per square foot.
While this one-off example is staggering, I wanted to look more broadly at the neighborhoods across America where housing values have reached stratospheric prices. To get at this, the housing and real estate site Zillow provided us with their estimates of current median home values for neighborhoods across the United States. The data provided to us by Zillow’s Krishna Rao cover roughly half of the 43,000 ZIP codes currently in use in the United States, focusing on those where Zillow has enough information to be accurate with their estimates. The table below shows the ten most expensive ZIP codes in America.
|The 10 Most Expensive ZIP Codes in America|
|ZIP Code||City/Area||Metro Area||Median Home Value|
|94027||Atherton (near Palo Alto)||San Francisco||$4,590,900|
|11962||Sagaponack (the Hamptons)||New York||$4,075,700|
|90210||Beverly Hills||Los Angeles||$3,532,100|
|94304||Palo Alto||San Jose||$3,331,500|
|02199||Boston (Prudential Center)||Boston||$3,330,400|
|33109||Fisher Island||Miami-Fort Lauderdale||$2,941,100|
|90402||Santa Monica||Los Angeles||$2,837,800|
|94028||Portola Valley (near Palo Alto)||San Francisco||$2,826,800|
|10013||New York (Tribeca)||New York||$2,824,000|
|92661||Newport Beach||Los Angeles||$2,701,100|
The highest-priced ZIP code is Atherton, an elite suburb of Palo Alto home to both old money and wealthy Silicon Valley venture capitalists and entrepreneurs. In fact, three of the top ten most expensive ZIP codes are in the Bay Area, including parts of Palo Alto, Atherton, and nearby Portola Valley. In this tech-rich region, two ZIP codes—94027 and 94304—have median home values, astonishingly, above $3 million.
Two of these super-rich neighborhoods are in Greater New York, one in Lower Manhattan’s Tribeca and the other in the Hamptons. Three are in Los Angeles—in Beverly Hills, Santa Monica, and Newport Beach. One each can also be found in Boston and Miami.
Overall, 33 ZIP codes have median home values of more than $2 million. Nearly all of these were located in the New York, Los Angeles, San Jose, or San Francisco metro areas, with 10 each in the New York metro and the combined San Francisco-San Jose Bay Area. There was one each in Boston, Miami, Santa Barbara, and San Diego.
Another 201 ZIP codes had median home values of more than $1 million. A whopping three-quarters of these were in just three coastal areas: New York, Los Angeles, and the San Francisco Bay Area. The Bay Area had the largest number, with 60 ZIP codes with median home values of more than $1 million: 44 in San Francisco and another 16 in San Jose. Another 52 were in greater New York, spanning both Manhattan and some second-home enclaves of the Hamptons. And 39 more were in Los Angeles and Orange County. The rest are in places like Boston, San Diego, and Stamford, Connecticut.
These data shed light on the huge gulf in housing values across the United States, one that indicates the staggering extent of its class divide. The neighborhoods where the super rich have homes represent just a tiny fraction of the places where Americans live. These are really the “one percent” of neighborhoods. These 201 richest ZIP codes with median home values of more than $1 million account for less than 1 percent of Zillow’s total sample. Only 4,220 ZIP codes—19 percent of the total—have median home values of more than $250,000.
In contrast, just over a quarter of the ZIP codes in Zillow’s sample—5,262 of them—have median home values below $100,000.
At the bottom end of the spectrum, the places with the lowest housing values according to Zillow are either largely rural areas with few residents in the farthest reaches of Louisiana and Maine or the hard-pressed neighborhoods of crisis-ravaged industrial metros like Youngstown, Ohio; East St. Louis, Illinois; Memphis, Tennessee; Kansas City, Missouri; and Flint, Michigan. In these places, large numbers of homeowners continue to find themselves underwater. Their real estate is worth far less than their original investment, and they are essentially stuck in place.
These ZIP code data show the class divides within cities and metros as well, providing another indicator of the juxtaposition of concentrated disadvantage alongside concentrated advantage in many of the country’s most affluent cities and metros.
The map below tracks the metros with the most of these super rich ZIP codes. Notice how concentrated they are in California and the Northeast corridor.
The table below zooms in on the number and proportion of super-rich and less-wealthy ZIP codes in four metros: New York, Los Angeles, and the two Bay Area metros of San Francisco and San Jose.
|Median Home Values by ZIP Code|
|New York||Los Angeles||San Francisco||San Jose|
|Total Number of ZIPs||838||358||161||59|
|ZIP Codes Above $2 Million||10||7||4||6|
|1.2 %||2.0 %||2.5 %||10.2 %|
|ZIP Codes Above $1 Million||52||39||44||16|
|6.2 %||10.9 %||27.3 %||27.1 %|
|ZIP Codes Below $500,000||566||164||37||7|
|67.5 %||45.8 %||23.0 %||11.9 %|
In New York City, for example, there are ZIP codes in the Bronx and Queens where median housing values are well under $200,000—less than a tenth of the median value of the wealthiest Manhattan neighborhoods. Median home values are even lower in parts of New Jersey around Newark, just a dozen miles’ drive from some of the most expensive neighborhoods in the country. In nearby Connecticut’s Stamford metro, eight ZIP codes in towns like Greenwich and New Canaan have median home values of more than $1 million, while just a few miles away median home values are a tenth of that in much of the city of Bridgeport.
In greater Miami, a few centers of extremely high housing values sit amid large regions of far less wealth and advantage. Two ZIP codes have median home values above $1 million, just eight have median values above $500,000, and 22 have home values below $100,000.
In the Bay Area, however, housing has become so expensive that much of the middle class has been effectively priced out of home-ownership. Forty-four ZIP codes have median home values above $1 million, just nine have median home values below $300,000, and not a single ZIP code has a median home value below $200,000. In neighboring San Jose, just one of the metro’s 59 ZIP codes had a median home value below $400,000.
This extraordinary inequality in housing values parallels the deep class divides that beset these cities and our nation as a whole. As prices escalate at the top, there is more and more separation between the super rich and the rest. In some cases, wealthy homeowners aren’t even living in these investment properties, which serve as a new class of assets that are outpacing gains in even the booming stock market.
This "insane spike" in top-end real estate, as Felix Salmon wrote in June on Medium, is a sort of physical manifestation of economist Thomas Piketty’s now-famous statement that R, the return on investment, is now greater than G, growth. The rich are getting richer, and this wealth inequality, exemplified by these uber rich ZIP codes where even the median homes are worth more than $2 million, is the central contradiction of American capitalism.