By Meghan Hall
For years, both New York and California have been frequently pegged as two states with the nation’s highest cost of living, recording large growth in home prices year-over-year. But now, in addition to California and New York, numerous other states—including—Washington are seeing price surges of their own. A new report released by PropertyShark indicates that thanks to pockets of influence and luxury real estate are popping up in new markets, challenging California and New York’s traditional status as the most expensive places to live in the United States.
PropertyShark analyzed year-to-date residential sales to determine the median price of the most expensive zip codes throughout the country. PropertyShark, according to its report, calculated medians based on sale prices rather than asking prices to “more accurately reflect the reality on the ground in the country’s most cutthroat markets.” These competitive markets, PropertyShark notes, are where limited supply and high demand causes increases in final sales prices when compared with original asking metrics. The use of sales prices is also important as it ensures that luxury products—which are not only becoming increasingly popular, but sell for notable price cuts due to a prolonged period on the market—do not heavily influence data.
PropertyShark only considered zip codes with a minimum of three residential transactions that closed between January 1 and November 5 of 2019.
At the end of the study, PropertyShark came up with 125 zip codes that made the list as the most expensive in the nation. In addition to California and New York, nine states have zip codes ranked among the nation’s priciest. Connecticut and Massachusetts each contributed three zip codes, New Jersey, Nevada and Washington State each had two zip codes in the top 125, while Arizona, Florida, New Hampshire and Maryland each posted one zip code.
It is clear from the study, however, that both California and New York continue to dominate, with each state containing the West and East coast’s most expensive markets, respectively. California remained what PropertyShark calls the “uncontested leader” of pricy zip codes this year. In 2019, 91 of the 125 zip codes PropertyShark has listed as the nation’s most expensive were from California, including six of the top 10 priciest. New York, although expensive, had 18 zips in the top, the second-highest number of zips and one zip code less than 2018.
However, that still pales in comparison to the San Francisco Bay Area, which on its own holds 55 of the nation’s most expected zip codes, with one third of the region’s zip codes experiencing a 40 percent increase in median sales price over the past five years. With 13 top zip codes, San Francisco is classified as the most expensive city in the country.
The number one most expensive zip code is located in Atherton, Calif., located in San Mateo County. Its median sale price reached $7.05 million, a first, according to PropertyShark. In 2018, Atherton also made headlines when it saw its median sales price jump 35 percent. The most expensive East Coast zip and the number two spot nationally, was in Sagaponack, New York, whose median sales price reached $4.3 million.
Outside of California, the priciest West Coast zip code was in the State of Washington. With a median home sale price of $3.2 million, Medina, Wash., was ranked as the 12th most expensive zip code nationally. The waterfront town climbed three spots from last year thanks to a five percent increase in sales median, and has been steadily climbing over the past several years, up from a ranking of 22nd in 2017 and 35th in 2016.
In addition, Washington had another zip code made the most expensive list: zip code 98040, which contains Mercer Island, was ranked as 80th. Its median home sales price is just under $1.54 million. Like Medina, Mercer Island is located within King County, where the bulk of the Puget Sound’s population lives and works.
While California still continues to dominate as perhaps the nation’s most expensive state, secondary and tertiary markets are coming into their own as they develop their own economic centers and luxury markets.
Property Shark did not return The Registry’s request for comment.