Part of a real estate agency’s job involves understanding where different areas fall in terms of pricing and housing costs. As a result, it isn’t uncommon to see annual rankings of the country’s most expensive zip codes when it comes to housing. Taking things a step further and discovering whether the areas with the most expensive homes are also the areas where the wealthiest people live provides some pretty interesting insights.
Most Expensive Homes vs. Wealthiest Homeowners
You might believe that in the locations where homes cost the most, people would also earn the most. After all, real estate does seem to follow some of the rules of supply-and-demand, and the more people can afford to pay for a home, the higher the price climbs. Per recent research conducted by Property Shark, this is not the case at all. In fact, it is quite the opposite. According to the 2018 study, homes are most expensive in California – namely Southern California. However, 70 of the country’s top 100 wealthiest and highest-earning zip codes are located along the East Coast.
The Wealthy East Coast
With nearly ¾ of the country’s highest earning zip codes located in the East Coast coming as a huge surprise, the further breakdown is even more shocking. The Northeast itself – meaning states like New York, New Jersey, Pennsylvania, etc. – is home to 48 of those zip codes. Even more surprising is the number of top earners in D.C. and its suburbs. Here, there are 28 of the top 100 spots in the entire country. Regardless, home prices here are not incredibly far off from the national average, which means it may be more beneficial (and a better investment) for people living in and around D.C. to buy a home.
Do Any of the Zip Codes Match?
Of the 100 different zip codes analyzed for the wealthiest earners and the most expensive homes, only 27 of those zip codes made both lists. The most expensive zip code in the entire country, 94027, which belongs to the Atherton, California area, boats a median annual household income of right at $250,000. The average price of a home in this zip code was $5 million back in 2017. Fisher Island was 3rd in the country based on home prices, but it was 28th on the list in terms of income.
What This Means for the National Housing Market
There are many, many factors that can explain the gap between the top-earning zip codes and those with the highest home prices. For example, sunny California is everyone’s dream with its beautiful weather and spectacular scenery, so homes here are in high demand even though the people here may earn far less than those on the East Coast. Conversely, even though New York leads the entire country when it comes to the highest salaries with 20 zip codes out of 100, the truth is that winters there can be harsh, and many people prefer sunshine. Thus, homes are not in such high demand, and their prices are not as high.
It’s incredibly interesting that Montgomery County made the list of the top 100 wealthiest zip codes in the country, especially when it is considered that home prices are relatively affordable when compared to national and even regional averages. Again, this has much to do with demand, but it does say one thing for certain – now is a great time to buy a home in the Northeastern United States.