Where the Home Price Gaps Are Biggest

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In the fashionable Boston suburb of Brookline, Mass., prices jumped 10% during the year that ended in the fourth quarter, 2007, even as prices fell 2.7% in the Boston-Quincy metro area.

Manhattan, one of the world's wealthiest property markets, didn't make the list because data were not available from Fiserv, which counts single-family home transactions (New York is primarily a co-op and condo market). In Manhattan's tight market, the median sales price in the first quarter rose 13.2%, to a record $945,276 compared with the first quarter last year, according a report by Prudential Douglas Elliman.

Holding Up

"High-end activity has boomed," said Greg Heym, chief economist for Brown Harris Stevens, a residential brokerage firm in Manhattan. "We're not saying it's recession-proof; we're not saying it will never go down. But it takes longer for the fundamentals to change."

Wealthy Zip Codes are generally less vulnerable to a serious slide because they have fewer subprime borrowers and, often, a tight supply of homes. But most communities have a mix of houses, including some cookie-cutter developments. The mega-rich are choosy and look for fabulous, distinctive properties that have lasting value even in markets that have been weakened by investor speculation and overstretched buyers losing homes to foreclosure.

"I would never say any property is immune to market forces," says Chad Roffers, president of SKY Sotheby's International Realty in Sarasota, Fla. "But a condo or single-family home that more looks like a commodity is seeing a greater correction in price. The unique, one-of-a-kind properties that are difficult to replace are bringing top dollar or setting record prices."

Christopher Hain, a real estate agent with Ramsey-Shilling Associates in the Hollywood Hills, says homes of $10 million or more are in short supply in the Los Angeles area. In Beverly Hills, house prices at the lower end of the market—that is, $1 million or so—are much weaker than the top of the market, he says.

"I'm working on three developments: $5 million homes in Brentwood, $6 million homes in Beverly Hills, and $27 million homes in Bel Air," he said. "Which one am I most confident in? The $27 million development. I know they're going to sell because there will be nothing compared to it."

See BusinessWeek.com's slide show to find out which metro areas have the greatest median home price gaps.

Gopal writes about real estate for BusinessWeek.com in New York .