Not many places could take a 5 percent drop in their median home price and still remain the most expensive ZIP code in America for real estate. But Atherton did that this year, taking a $400,000 median price dip, but still maintaining a median of $7.9 million per property sold.
This brought Atherton’s 94027 ZIP code, located in San Mateo County slightly north of Stanford University, its eighth consecutive title as the priciest place in America.
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But Newport Beach is not far behind. The seaside Orange County city has three ZIP codes with median prices topping $4.6 million, all up a few hundred thousand from last year.
It’s rather eye-popping, but of the 10 priciest ZIPs in the nation, seven are in California. The median is the price level where half of all sales are for higher amounts and half for lower. For both Atherton and Newport Beach, this means in practical terms that sales prices topping $10 million have lately been pretty common.
Only Atherton among the highest-price California ZIPs has no waterfront. But not to worry, it is within a couple of miles of several marinas fronting on the San Francisco Bay, where homeowners can also park their boats — even if they can’t dock outside their back doors, like at some properties in Newport Beach.
There’s a lesson here for young families wanting to live in California, but unable to afford the ultra-high prices of the most expensive ZIPs: Look inland.
Areas like Glendale, Pasadena, Rancho Bernardo, Tracy and Elk Grove sport plenty of extremely livable homes and condominiums at prices far beneath what similar properties draw in coastal communities. This explains why California’s inland areas are growing far faster than coastal locales.
In fact, coastal areas in other areas of the country also boast prices soaring above what almost any first-time buyer can afford. The three non-California ZIPs on the national top-ten list include one in Miami Beach, Florida, and two on Long Island, New York.
High prices that are nevertheless still rising were common not just in California and the other top ten ZIPs, but also nationally, creating a crisis that presidential candidates last fall promised to fix by spurring the building of millions of new homes. These would rise in many areas, with inland California boasting prime areas for development. The prospect of new communities in some currently vacant desert areas has also been touted by some housing officials as a solution not only to the affordability crisis, but also to homelessness.
After real estate prices slipped a little overall in 2022 and 2023, says the Property Shark real estate research firm which generated the latest top-ten rankings, they rose again this year in most places.
The firm reports that two-thirds of the nation’s 100 priciest ZIP codes saw sale prices increase in 2024, compared with just 29 percent in 2023. One result was that a record 15 ZIP codes saw median sale prices of $4 million or more.
Plus, prices in large cities pretty much mirrored the top rankings of ZIP codes. New York, which took over last year for Los Angeles as America’s high-price leader among sizable cities, retained that ranking, even as its toniest ZIP, which includes Tribeca, was only No. 23 nationally. L.A. remained No. 2, with Palo Alto trailing not far behind at No. 4.
A key finding is that about two-thirds of America’s priciest ZIPs are clustered in Los Angeles, Santa Clara, San Mateo and Orange counties, contributing to the home price crisis that has driven many young professionals to live in other states while telecommuting to jobs in California, putting in only occasional appearances at their nominal offices.
One side effect has been that neighboring states like Nevada and Arizona are now more politically centrist than their long history as Republican bastions might indicate. Ex-Californians have also driven up prices markedly in those states, as well as Idaho, Texas and Oregon, where many new residents arriving from California report being ostracized by longer-term residents.
The bottom line: The priciest California areas show no signs of major pricing retreats, which leaves few coastal options for young families seeking to buy first homes. That makes looking inland — even to deserts — a must for many.
Email Thomas Elias at tdelias@aol.com, and read more of his columns online at californiafocus.net.