November Housing Report: Most Expensive Zip Codes; Opportunity Zone Price Bump; Millennial Commutes Increase
At $7 million, Atherton, Calif.’s 94027 is the most expensive zip code for the third year in a row, according to an annual report from PropertyShark, New York.
The report (https://www.propertyshark.com/Real-Estate-Reports/most-expensive-zip-codes-in-the-us) also noted San Francisco boasts 13 of the nation’s priciest zip codes, the highest number in any city. California remains unchallenged in its leading position, featuring 91 zips in the top 100. Los Angeles County is the most expensive among counties, contributing 21 of the priciest zips in the U.S. The Bay Area is still the most exclusive metro, originating 55 of the country’s top zip codes.
The report said nationally, 14 zip codes posted median sales prices above the $3 million mark. The priciest 100 zip codes are located in just 11 states. Although California and New York State dominated 2019’s top 100, isolated pockets of extreme affluence and luxury real estate meant that the zip codes of nine additional states made the ranking zips. Specifically, Connecticut and Massachusetts each contributed three zips, New Jersey, Nevada and Washington had two each, and Arizona, Florida, New Hampshire and Maryland are each represented by one zip.
The report also noted while 63 zip codes experienced contractions in their median sale price compared to year-ago figures, 38 zip codes saw their medians climb–including a “spectacular” 71% price surge recorded in Brooklyn’s 10001–and 4 zip codes’ medians were unchanged. An additional 20 zips are new compared to last year’s ranking.
PropertyShark said the 5% price growth registered in Atherton’s 94027 resulted in a historic high, making 2019 the first year in which a zip code’s median sale price surpassed $7 million. As expected, this made Atherton’s 94027 the #1 most expensive zipcode in the U.S. in 2019 with a median sale price of $7,050,000. This was also the second year in a row that growth in Atherton’s median made headlines. A year ago, Atherton asserted itself with a 35% jump in its median.
In a separate report, ATTOM Data Solutions, Irvine, Calif., said its analysis of nearly 3,700 government-designated “Opportunity Zones” found nearly half saw median home prices rise more than the national increase of 8.3 percent over the past year through the third quarter.
The report also found 79 percent of the zones had median home prices in the third quarter that were less than the national median of $270,000–nearly the same percentage as in the second quarter. Forty-six percent of the zones had median prices of less than $150,000, also roughly the same as in the prior quarter.
“The nationwide home-price surge in the third quarter spread through so-called Opportunity Zones, much as it did the rest of the country,” said Todd Teta, chief product officer with ATTOM Data Solutions. “Despite sitting in some of the nation’s poorest areas, Opportunity Zones were hardly immune from a housing boom heading into its ninth year. That’s encouraging news for people living in those communities as well as investors looking to take advantage of the Opportunity Zones program.”
Other high-level findings:
–Among the 3,658 Opportunity Zones with sufficient data to analyze, California had the most Opportunity Zones, with 477, followed by Florida (332), Texas (293), Pennsylvania (176) and North Carolina (170).
–In metros with sufficient sales data to analyze, 87 percent of Opportunity Zones had median third quarter sales prices that were less than the median values for the surrounding MSAs. Among those, 31 percent had median sales prices that were less than half the figure for the MSAs. At the same time, 13 percent of the zones had median sales prices that were equal to or above the median sales price of the broader MSAs.
–The Midwest continued to have the highest rate of Opportunity Zone tracts with a median home price of less than $150,000 (71 percent), followed by the South (56 percent), the Northeast (47 percent) and the West (12 percent).
–States with the highest percentage of census tracts meeting Opportunity Zone requirements include Wyoming (17 percent), Mississippi (15 percent), Alabama (13 percent), North Dakota (12 percent) and New Mexico (12 percent). Washington, DC, also is among the leaders (14 percent). Nationwide, 10 percent of all tracts qualify.
In another report, Redfin, Seattle, said more than 90% of millennial homebuyers would choose a single-family home over an equal-priced unit in a triplex with a shorter commute.
“Even as we’ve seen a revival in many urban neighborhoods, the American ideal of a detached home with a white picket fence and a private lawn doesn’t appear to be changing–at least for the time being,” said Redfin chief economist Daryl Fairweather. “While some cities and states like Minneapolis and Oregon are aiming to create more affordable multi-family housing options by eliminating single-family zoning, as long as Americans are willing to pay a premium for detached homes, developers are likely to continue building them.”
The August survey asked more than 1,400 U.S. residents who are thinking of buying or selling a home in the next year to choose a home based on the following hypothetical situation: “You find a single-family home with a backyard for the same price as a unit in a triplex (a building with three attached homes). The triplex is smaller, but meets your space needs, and has a shared backyard and significantly shorter commute. Assume the school quality and safety ratings are identical.” The report breaks down the results both by age and geography.
The survey said 89% of homebuyers would prefer a single-family home with a backyard over a unit in a triplex with a shorter commute.
Among millennials, 93% would choose a single-family home, as would the vast majority of all other age groups over 25. Broken down by region, we found that regardless of where people live within the U.S., more than 85% of homebuyers and sellers prefer single-family homes over a unit in a triplex with a shorter commute.