Beverly Hills and Palm Beach Take a Back Seat
By Charlie Elliott, JR., MAI, SRA

Over the years, most of us have become discriminating whether we want to admit it or not. That does not have to be a bad thing. No, we are not talking about racial discrimination or being sexist. For purposes of this article, we will refer to this discrimination as a positive quality that we have developed as Americans. It is a quality that of us have had to develop in order to survive in our industry.

We have seen shades of this discrimination in slick-back magazines, which may refer to people having discriminating taste. This usually manifests itself within the context of some of the finer things in life, including classy apparel, gourmet food, high-priced automobiles, and, well; you get the picture. In addition to these categories of discriminating taste, we will introduce another category, that of high-dollar real estate. The home-price data below will demonstrate that we are not only a discriminating people, but that some of us are also spending many millions of dollars to prove it.

In the past we all have had reason to participate in discussions where eyebrows were raised when an address of an expensive section of town was dropped. This may have been by a pretentious relative, a social-climbing friend or by a more innocent individual simply making conversation. Nonetheless, when an address come up in conversation, whether it be Country Club Drive in Anytown, USA, Worth Avenue in Palm Beach or Rodeo Drive in Beverly Hills, most of us, particularly those of us in the real estate and finance industries, consider it our business to know that this is a pricey, if not highbrow part of town.

This article will not be devoted to the socially elite, however, some of the addresses, which we’ll talk about, will be owned by some of those folks. Some of the properties in these areas will be owned by “old money” individuals, and some will be owned by the “nuevo rich.” Rather than concentrating on street addresses in a certain town, this article will be devoted to the priciest ZIP codes in our country. Perhaps, we can think of it as an update on where the wealthiest among us live and what they are spending on shelter.

Recently Forbes.com released a list of the top 10 ZIP codes in terms of the highest average housing prices. The ranking was done with the research of OnBoard, a company in New York that specializes in data collection, Miller Samuel, a real estate appraisal and consulting firm, and the National Association of Realtors.

The study concluded that the most expensive ZIP code in the United States, based housing value, was 94027 in Atherton, CA, where the median house price in 2004 was $2,496,553. Atherton is located in the Menlo Park area near San Francisco.

Coming in second on this exclusive list is ZIP code 93108 in Montecito, a suburb of Santa Barbara in southern California, with an average home value of $2,176,521. Third was 92067 in Rancho Sante Fe, CA, at $2,144,254. It was one of two ZIP codes in the San Diego County town. No. 4 was 92662 in Newport Beach, CA, where home values averaged $2,046,577.

The highest ranked ZIP code outside of California was 11765 in Mill Neck, NY, a town of about 850, located just north of the Big Apple, where home values average $1,948,366. Coming in at No. 6 and the lowest California ZIP code on the top 10 (That’s right; Beverly Hills 90210 didn’t make it.) was 94967 in Ross, a Marin County suburb of San Francisco, where home values average $1,910,263.

Lucky No. 7 was ZIP code 89402 in Crystal Bay, NV, where home values averaged $1,806,962. This ZIP is in the Lake Tahoe area. No. 8 was 07620 in Alpine, NJ, where the median home value was $1,773,180. Alpine is about 2.4 miles from Yonkers, NY. Ninth was 89413 in Glenbrook, NV, not far from Crystal Bay, where the medium home price was $1,765,000. Rounding out the top 10 was 07976 in New Vernon, NJ, near Morristown, where the median home value was $1,760,000.

I do not know about you, but I cannot say that I live in any of these ZIP codes. Neither do I consider myself a part of “old money” or the “nuevo rich,” however, there are not just a few, but perhaps millions of people who are one or the other. Please bear in mind that these prices are not simply the most expensive homes within the neighborhood but rather the average, the middle of the road for that ZIP code. Yes, there will be a few below this price and for each of those there will be another, which is higher in value. Said another way, if you live in one of these neighborhoods and you happen to own a home worth only a million dollars, it is possible that you would be looked down upon by those of the upper crust having homes worth multiple millions. When Palm Beach and Beverly Hills do not make the list, you know that you are in a ritzy part of town if you are in one of the ZIP codes that do make the list.

What does all of this mean to those of us who thought that we were doing pretty well in our luxury foreign automobiles and two-story homes a few notches above that Chevrolet and modest house with the picket fence we might have dreamed of growing up? What does all of this mean to those of us with our college degrees and, in some cases, second homes, when our ancestors, in many cases, struggled to have one modest home without indoor plumbing and usually did not complete high school?

To me it means that we’ve got it good in this country, even as middle-of-the-road professionals. We have got it so good that many of us have lost sight of just how fortunate we are to live in the USA. And, yes, for those of us who strive to have an even higher standard of living, there is plenty of room at the top, even above those in Beverly Hills and Palm Beach.

Do we live in a great country of what?