The Richest Zip Codes—and How They Got That Way

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The role of wealth in elevating certain areas was explained last year in an academic paper called "Superstar Cities" by economists Joseph Gyourko and Todd Sinai of the University of Pennsylvania's Wharton School and Christopher Mayer of Columbia University. The authors focus on entire metro areas, such as San Francisco and Boston, but in an interview, Sinai says that it's true on the Zip code level as well. Says Sinai: "High-income people are essentially outbidding low-income people for the more desirable suburbs."

Critical to the authors' argument is the limited supply of land in "superstar cities." Most of the Zip codes at the top of the list have either no developable land left or extremely restrictive zoning. So the only way people can get in is by buying from someone who's already there. That fits with the experience of Daniel Bowerstock, a broker in the barrier-island beach community of Avalon, N.J., which is the Garden State's most expensive Zip code. Says Bowerstock: "We have some of the most stringent zoning that I've seen. That, I would say, is the No. 1 draw."

No Poor People

The top Zip codes by state aren't all alike, reflecting the fact that the rich have varying tastes just like the rest of us. Glen Head is a glacier-sculpted, old-money town on Long Island's North Shore. Newport Beach is sun-baked and buzzing with the energy of high tech and other expanding businesses. Cambridge, Mass., is the home of both Harvard University and the Massachusetts Institute of Technology. Hinsdale, Ill., outside Chicago, is quiet. "The paper has, you know, if a cat's stuck in a tree," says John Eyen, a Coldwell Banker broker who lives in Hinsdale.

Some places can trace their surge in property values to the presence of booming local industry. A good example is the 98004 Zip in Washington state, which covers upscale Bellevue. Long a haven for executives who worked at Boeing (BA) or local lumber companies, beginning in the 1980s employees from tech companies such as Microsoft (MSFT), Amazon.com (AMZN), and Real Networks (RNWK) have used their lucrative stock options to drive up local real estate prices.

Even within Greenwich, there are distinctions, says Tamar Lurie, a Coldwell Banker broker. Some people migrate to the big estates of 06831 for peace, quiet, and horses, while others move to the shoreline Zip of 06830 (No. 3 on the national list) for water views and a livelier lifestyle.

One commonality, though, is that you will be rubbing elbows with people who, like you, don't have to worry much about where their next meal is coming from. That in itself is a powerful lure for people who have finally made it to the top.

Click here to see the U.S. Zip Codes with the highest median home prices in 11 states, along with their appreciation in property value since 2001.

Click here to see the 275 Zip Codes with the highest median home prices.

With Maya Roney