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New York And Florida Dominate 2016 List Of America's Most Expensive ZIP Codes

This article is more than 7 years old.

Demand for high-end homes is finally waning after six years on the boil. The signs of a slowdown are clearest in Silicon Valley, where just a year ago eight-figure list prices, bidding wars and one-week sales were commonplace. Surpassing the Valley this year are ZIPs in New York and California, but sellers in these high-priced havens would be wise to stay humble: Their hometowns could be next.

Florida’s Manalapan takes the No. 1 spot on Forbes’ 2016 list of America’s Most Expensive ZIP Codes, with a median listing price of $7.86 million for homes on the market over the last three months, but New York clearly reigns supreme, claiming six of the top 10 slots and a dozen of the top 25. Atherton, Calif., which ruled the list for three years in a row, falls to third.

“The ultra high end, in Florida in particular, is dominating this year’s list and new inventory in Manhattan is dominating this year’s list. In the rest of the country, specifically in Northern California, we are seeing lighter demand,” says Michael Simonsen, chief executive of Sunnyvale, Calif.-based Altos Research, which crunches the data for this list. “The question is, does this mean that those Northern California markets are leading the rest of the country?”

For the full list of 500 ZIP codes click here. 

For a look at some of the most expensive homes in America's Most Expensive ZIP codes click here. 

New York

In 2015, New York City ZIPs took just three of the top 25 spots on our list. The city’s reemergence in 2016 is largely the result of an inventory shift: After years of exuberant development, a number of ultra-high-end multifamily properties have recently come on the market in Manhattan. (Note: Our list is based on asking prices for homes on the market for the 90 days ending Nov. 18, not sales, to provide a more accurate snapshot of the current state of the market.) But the new high-priced supply enters just as consumer expectations are coming back down to earth. Even the ultra-wealthy are proving less inclined to scoop up high-priced properties than they were a year ago.

For someone selling an individual home, the shift in the market may mean waiting a few years to sell or lowering the price. For a developer unloading dozens of apartments, the calculations are more complicated. There may be more room to profit at lower prices, but investors want a return and the optics of taking everything off the market would be terrible.

“My hunch is that inventory is coming on line as a result of the demand of the last few years and was slower to come on line and is coming in late,” says Simonsen. “The lead time on a condo project is multiple years. The lead time on [an existing] house in Atherton may be six weeks. So you see [lighter demand] reflected in that much more quickly.”

This year 10075 is the priciest ZIP in the Empire State and the second priciest in the country. After barely cracking the top 100 last year, this residential enclave on Manhattan’s Upper East Side rocketed to the top with a median list price of $7.22 million for the 39 homes on the market this fall. Last year the median was $2.15 million. The jump is thanks to a few particularly pricey townhouses.

Perennially in the top five, 11962--Long Island’s Sagaponack, in the town of Southampton--claims the No. 4 slot. The beach retreat is followed by three Manhattan ZIPs: 10065 and 10028 on the Upper East Side, as well as Soho’s 10012, which had the highest ranking in the city last year. Other top city ZIPS are 10014 and 10013 downtown and, 10024 and 10021 uptown.

This year’s slight shift from downtown cool to uptown calm does not surprise Deborah Grubman, a broker with the Corcoran Group who has big listings in several top ZIP codes. She likens it to college rankings—Princeton beat Harvard this year, but does that make Harvard bad? Similarly, there is no longer an undesirable place to live in Manhattan. “You can pay a lot of money in pretty much any neighborhood in the city,” notes Grubman.

Atherton

Atherton may have lost its crown this year, but don’t feel too sorry for this San Francisco suburb. The median 94027 home still costs $7.16 million. That's down from $10.56 million last year, a level that even local agents admit was inflated. The price of an average Atherton home is “leveling off,” says Carol MacCorkle, a broker with Pacific Union and listing agent for a $19 million home that is currently the town’s most expensive.

However, according to MacCorkle the biggest changes are happening at the extremes. Last year $20 million and even $30 million homes were moving relatively briskly, encouraging more people to put their mansions up for sale at sky-high prices. This year only six or seven homes have sold in that stratosphere, giving would-be sellers pause. Meanwhile, the $2 million homes that pass for starter homes in Atherton are no longer prompting the bidding wars seen in 2014 and 2015, meaning more moderately priced homes are sitting on the market for longer. The result is less inventory at the high end and more inventory at the low end, netting a drop in our ranking.

Manalapan

In Manalapan, Florida—33462—multimillion-dollar homes are a dime a dozen. Located off the Sunshine State’s eastern coast, the tiny sliver of land is the most expensive ZIP code—or piece of a ZIP code—in America. The median price of the 24 homes listed for sale this fall was $7.86 million.

The most expensive home in Manalapan is a $195 million stunner known as Gemini that was officially listed in January. It is also the most expensive home in America. The nine-figure ask is an outlier even in Manalapan, but there is just one home for sale in Manalapan with an asking price below $1 million. Since there are several mega properties on the market, Manalapan would still top this year’s list without Gemini. Given the preponderance of single-family homes in this market, however, next year could be a different story if demand continues to weaken and homeowners decide to pull their homes off the market.

This is not only Manalapan’s first year at the top of the list, 2016 is the town’s first year on the list at all. That’s due in part to our decision to analyze certain ZIP codes at the town level, when a postal code is shared by two or more places with very different inventory mixes. Manalapan is geographically distinct from the rest of 33462. If Listings in Lake Worth and Lantana were included, the ZIP would not have made the top 500.

“This is a function of working hard to get the best picture of a local market. There is now sufficient inventory in Manalapan to justify speaking about it as a separate market,” says Simonsen. “ZIP codes are a convenient way to measure a market or a part of town, but they are often across multiple towns, and very quickly neighborhoods can be very different when school districts change or even having a different mailing address can be super impactful on price.”

Methodology

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 calculated the median home 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 November 18. 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 may mean median prices in some Manhattan neighborhood are actually even higher than they appear.

ZIP codes with fewer than ten home on the market are not included, which this year eliminated some perennially pricey ZIPs in Northern California. Some ZIP codes appear multiple times; as discussed in the case of No. 1 Manalapan, this is because the postal code is shared by two or more towns with very different inventory mixes.

For the full list of 500 ZIP codes click here. 

For a look at some of the most expensive homes in America's Most Expensive ZIP codes click here. 

Gallery: Homes In America's 50 Most Expensive Zip Codes 2016

 

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