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Competition for Shrinking Inventory Fuels Faster-Selling Homes

As U.S. housing markets across the nation are cooling down and continue to recover from record-low inventory, home prices in the most exclusive ZIP codes have increased, according to a new Point2 study.

Amid dwindling housing supply and 23-year-high mortgage rates, homes are still flying off the market in nearly half of the 100 most exclusive U.S. zip codes analyzed. And while properties on the affordable side sold fast, the report found that competition in the ultra-luxury markets is in a league of its own.

Point2’s sister division, PropertyShark, has released its annual ranking of the 100 most expensive ZIP codes in the U.S. The report highlighted the record-breaking price tags in some of the country’s ultra-exclusive zip codes against the national backdrop of declining median sale prices.

Which of these luxury markets are red-hot, despite the ever-expensive figures?

Here’s what the study found when Point2 analyzed median days on market (DoM) and the share of properties recently sold above the asking price in the most lavish ZIP codes in the nation:

  • In 46 of the country’s 100 priciest zip codes, properties lasted less than a month on the market.
  • In 8 high-end areas, homes were sold in 10 days or less, including the 94022 in Silicon Valley’s Los Altos as well as Mercer Island, WA's unique 98040.
  • High-end residences in 98039 in Medina, WA, were sold in just 1 week, despite a median sale price of almost $4,400,000.
  • Compared to last year, properties sold faster in half of the country’s most expensive ZIP codes. In 33109 of Miami Beach, FL, September data shows homes purchased 116 days quicker than the same time in 2022.
  • Inventory plummeted in most of the most affluent ZIP codes in the past year. The for-sale stock in 92861 and 92657—two ZIP codes in California’s coveted
  • Orange County—declined by about 60%.
  • Bidding wars are here to stay in most of the priciest enclaves. In 23 of the country’s most expensive ZIP codes, more than half of the properties were sold above asking price; in San Jose, CA, most of the homes sold in 95130 (96%) and 95129 (85%) went above asking price.

Million-Dollar Estates Sell in Just One Week in Gates’ and Bezos’ Washington Area

The run-of-the-mill homebuyer might not line up for the uber-luxury homes, but the housing market in the most exclusive ZIP codes is far from stagnant," said Doug Ressler, Manager of Business Intelligence at Yardi Matrix. “Despite the uncertainty, stubborn inflation, interest rate gyrations, and continual struggles with inventory and supply chains worldwide, local and regional conditions have sustained the luxury property market. In fact, things are better than many had expected despite supply and demand being out of balance in many places”."

Recent data from September shows that, in 46 of the country’s priciest ZIP codes, listings sold in just 30 days or less. While many of the fastest-selling ZIP codes are wealthy areas in California, the most sought-after high-end ZIP code appears in the addresses of Jeff Bezos and Bill Gates, which is enough to form an idea about how affluent the 98039 in Medina, WA, is. The median sale price here reached $4,388,000, yet properties rapidly sold in seven days.

Top 10 Fastest-Selling, Most Expensive U.S. Zip Codes:

  1. 98039 Medina, WA (Median days on market: 7)
  2. 95130 San Jose, CA (8)
  3. 95129 San Jose, CA (9)
  4. 94022 Los Altos, CA (9)
  5. 95014 Cupertino, CA (9)
  6. 94087 Sunnyvale, CA (9)
  7. 98040 Mercer Island, WA (9)
  8. 94024 Los Altos, CA (10)
  9. 94040 Mountain View, CA (11)
  10. 95070 Saratoga, CA (12)

Famous for its residential luxury markets and sky-high home prices, California dominated the list of entries in the most high-end zip codes. San Jose’s (95130) and (95129) saw homes flying off the market in just eight to nine days, regardless of the impressive median sale price, which hovers around $2 million. Also lasting nine days on the market were properties in Los Altos’ 94022 (median of almost $4 million); Cupertino’s 95014; Sunnyvale’s 94087; and 98040 in Mercer Island, WA.

Bidding Wars at Home in Priciest Zips: Competition for Dwindling Inventory Leads to Homes Selling Faster Than in 2022

In more than half of the 100 most affluent ZIP codes, residential properties are selling faster than they did last year. While in some areas they fly off the market just one or two days sooner, the differences are more pronounced in others.

For instance, the housing market in the lavish 33109 of Miami Beach, FL, is not exactly red-hot, but September data shows that homes here sold 116 days faster this year than last year. More precisely, listings stayed active for 216 days, which might be a result of the $5.5 million median sale price combined with the 8% uptick in inventory. Similarly, properties in the serene 11976 in Water Mill, NY, sold 40 days quicker than they did last year, despite a 22% hike in the median sale price to reach $4.5 million.

Further fueling the competition fire is the fact that the majority of the country’s most expensive areas saw their for-sale inventory either drop or stagnate since last year. For example, the number of properties available dropped dramatically since last year in the 06878 of Riverside, CT (56%), much like it did in Newport Beach’s 92657 and other wealthy California ZIP codes.

Not only are homes selling like wildfire in some of the country’s priciest areas, but homebuyers are also willing to cover the high price tags. While bidding wars are nothing new in the luxury sector, paying above the asking price has become the norm for those looking to secure their opulent residence. In 23 of the country’s priciest ZIP codes, some 50% to 96% of the properties sold were purchased above their respective asking prices. For comparison, about 33% of the homes sold nationwide went above the initial asking price.

New York Snapshot: Days on Market Vary in Highest Concentration of Pricey Zip Codes

According to PropertyShark, New York state added five more zip codes to the list of priciest in the country, making it to 22. With eight of these in New York City alone, this was the highest share of pricey zip codes in the U.S.

From Brooklyn to the Hamptons, listings sold in wealthy New York ZIP codes lasted anywhere from about two weeks to almost 200 days on the market, according to the latest September data. That was the case of the ultra-exclusive celeb spot of Water Mill's 11976 (median sale price $4,500,000). Likewise, homes sold in 11968 in Southampton and 10007 in New York City stayed on the market way past 100 days, whereas homes in 10580 in Rye were purchased in just 15 days (60% of them for more than the initial asking price).

In New York, the highest median sale price went to the 11962 of Sagaponack at a whopping $8,075,000, following a 40% increase in the past year. But listings here spent about six weeks on the market—almost as many as in East Hampton’s lavish 11937.

Come hell or high water on the housing market, luxury sells. With the high-end for-sale inventory still at historically low levels, it’s interesting to see how this will affect affluent homebuyers' standards.

“Traditional buyer preferences for waterfront luxury will continue, while the newer trend of living close to green areas—an evolution of the post-pandemic need for private space—has fueled luxury living further inland near parks and golf courses,” said Ressler.

To read the full report, including more data, charts, and methodology, click here.

About Author: Demetria Lester

Demetria C. Lester is a reporter for DS News and MReport magazines with more than eight years of writing experience. She has served as content coordinator and copy editor for the Los Angeles Daily News and the Orange County Register, in addition to 11 other Southern California publications. A former editor-in-chief at Northlake College and staff writer at her alma mater, the University of Texas at Arlington, she has covered events such as the Byron Nelson and Pac-12 Conferences, progressing into her freelance work with the Dallas Wings and D Magazine. Currently located in Dallas, Texas, Lester is an avid jazz lover and likes to read. She can be reached at [email protected].

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