The richest places in the U.S. keep getting richer.
Whether it's Palm Beach or Fisher Island in Florida, or the hamlet of Atherton in California’s Silicon Valley, millionaires and billionaires are paying a premium to live next to each other.
The pandemic has only accelerated a trend that was prevalent even before Covid-19 hit, pushing up home values in the most elite enclaves on Bloomberg’s annual ranking of the U.S.’s richest zip codes.
“It’s obviously the 1% bubble, and the bubble is getting bigger,” said Terry Zmyslo, store manager of Cremieux, the French luxury brand that opened a branch in Palm Beach three years ago. “The people moving down here are influential, with a lot of money. You Google them and you’re blown away.”
Bloomberg identified the 100 wealthiest zip codes using 2018 Internal Revenue Service data, the most recent available, and then looked at housing prices since the pandemic to see the surge in prosperity. While Covid-19 has emptied some urban neighborhoods, including the tonier parts of Manhattan and San Francisco, most of the wealthy’s favorite haunts have only gotten more popular. Between March and September of 2020, the average home value in the 100 top-ranked zip codes rose an average of $28,600, compared with $6,300 in the same span last year.
In Palm Beach, the average income jumped 29% in 2018 to $1.37 million, making zip code 33480 the third-richest in the U.S. The most famous resident is President Donald Trump, who last year made Mar-a-Lago in Palm Beach his official permanent home. But there are far richer transplants including Interactive Brokers Group Inc. founder Thomas Peterffy, who's worth $17.1 billion and has barely stepped foot in Connecticut since a Democrat was reelected governor in 2014.
Fisher Island, a 216-acre barrier island near Miami, is once again the wealthiest zip code (33109) with an average income in 2018 of $2.2 million, according to the Bloomberg analysis. In second-place Atherton — zip code 94027 — earnings surged by a third to $1.72 million. To be included among the top 100 on this year’s ranking, a zip code needed an average income of more than $405,000.
The pandemic’s effect has been mixed in Atherton, where the median home value of almost $6.5 million is the highest among the top zip codes. Many rich executives who live in the small town adjacent to Menlo Park, headquarters of Facebook Inc., have decamped to Lake Tahoe, Carmel Valley and other nearby vacation spots as they no longer have to go into the office, said Coldwell Banker real estate broker Elaine White.
Still, homes for sale in Atherton have been snatched up quickly by buyers, who have poured money into upgrading their new suburban oases as they shelter from the virus. “They’re trying to turn their homes into a resort,” White said, adding swimming pools, guest houses and other amenities. “It gives a whole new meaning to a staycation.”
Almost half of the richest zip codes, 49 of the 100, are in just seven counties: Manhattan and suburban Westchester County in New York, Connecticut’s Fairfield County, Chicago’s Cook County, California’s Los Angeles and Santa Clara counties, and Houston’s Harris County.
Harris, the most populous county in fast-growing Texas with 4.7 million people, went to six zip codes on this year’s list from just one last year.
The Bloomberg gauge included zip codes with at least 200 tax returns, based on filings submitted in 2018 and a minimum of 500 housing units. Large outliers —such as locations with larger than 200% fluctuation in filing units— are excluded as well. More than 22,500 zip codes met the criteria to be evaluated.
To measure the effects of the pandemic on real estate, Bloomberg took the qualifying zip codes, classified them according to distribution of average incomes, and analyzed how home value have changed. Generally, the highest gains have been in neighborhoods that were already very well-off.
In Palm Beach, Covid-19 has accelerated a trend that began a few years ago, with many of its newest residents transplants from New York. Founded in the Gilded Age, the community has a long reputation as a haven for the old and super wealthy.
Many of Palm Beach’s latest arrivals, however, have been younger, often with children in tow. Two private schools have opened in the past decade to cater to this set, each backed by a billionaire: Oxbridge Academy, founded by Bill Koch, and the Greene School, started by Jeff Greene and his wife Mei Sze Greene.
Other signs of a younger, hipper vibe on Palm Beach are the arrival of local outposts of New York restaurants like Almond and Le Bilboquet, and the scene around the recently revitalized Royal Poinciana Plaza, home of the Cremieux store and a branch of auction house Sotheby’s, which just opened for the season.
Sales at the Cremieux store rose 45% to 55% in July through September, what are normally the worst months, Zmyslo said. “One guy came in and dropped $5,000 in 5 minutes,” he said.
This article was provided by Bloomberg News.