Yet the question of which zip code is the priciest and whose home is the most expensive is only half of the story. The bigger tale lies in just how far the world of the average American is from that of the ultra-rich. While the price tags on Beverly Hills homes and private Caribbean islands are often well known, the chasm between the middle class and the seriously wealthy is almost impossible to measure.
Several analysts have recently reminded us about the breadth of that chasm, and whether they use Citibank's term "the plutonomy," Robert Frank's word (and the title of his book) Richistan, or Atlantic Monthly author Chrystia Freeland's phrase "The New Global Elite," the message is the same: The ultra-rich live in a land whose borders are closed to the vast majority of us.
And while the differences are visible in clothing, schools, cars and almost every other aspect of daily life, they become particularly obvious when it comes to real estate. Against the yardstick of huge paychecks and pricey estates, it's almost shocking to realize that the median American household income is $49,777 and the median price of an existing home is $168,800.
Most Expensive Markets
In much of America, those average incomes and housing costs may not seem that low, as even the outliers are closer to the median. On the East or West Coasts, however, the distance between the average and the ultra-wealthy becomes stark. In Forbes' 2010 list of the 10 most expensive zip codes, four were near Los Angeles, four were in or near New York City and the remaining two were outside San Francisco.
The top neighborhood, Duarte, Calif., boasts a median house price of $4,276,462, more than 25 times the price of an average American home. To put it another way, the average American family could buy a home in Duarte -- if they were willing to pour their entire yearly income into it for 86 years. On the other hand, if they followed the standard rule of thumb dictating that one should spend no more than 30% of yearly gross income on housing, the average family would need just over 286 years to pay off the average Duarte home. Of course, both of those numbers assume that the buyers got an interest-free loan, didn't have to pay closing costs and could get a property tax abatement for a century or three.
By comparison, Alpine, N.J., is almost a bargain. The fourth-most-expensive neighborhood on Forbes' list, and the priciest one outside of California, is conveniently located across the Hudson River from New York City. The median home there is a comparative value at $3,814,885, only 22 times the cost of the average American home. The average family could pay it off in just over 76 years -- assuming they were willing to go without food and clothing, and could find a bank willing to make that interest-free loan.
Overall, the average home price in one of America's top 10 Richistans is $3,634,545, making them available to any average American family that's willing to dedicate 30% of its income for the next 243 years. But until multigenerational Japanese-style 100-year mortgages come to the U.S., these zip codes will be closed to most people.
Most Expensive Homes
While those home prices are impressive, it's worth remembering that they represent the median, or the price at which 50% of the houses in a zip code are more expensive and 50% are cheaper. When one looks at the real outliers, the numbers get even more shocking.
Put in terms we can relate to, the Spelling home costs as much as 888 ordinary homes, enough to outfit a small town. Unfortunately, even 888 homes wouldn't have quite enough space for the 3,013 families whose annual salaries it would take to purchase the Spelling mansion.
The Manor has now been on the market for almost two years, indicating that Candy Spelling may have overestimated its value. After all, the house is more than 20 years old, and the real estate market tends to favor new construction.
But even among newly built homes, the most expensive estates fall far short of the Spelling mansion's price tag. For example, the partially completed Siegel mansion, a 90,000-square-foot home in Windemere, Fla., is on offer for a mere $100 million (completed) or $75 million (as is), putting it at the top of the new real estate list. Even so, it still costs as much as 592 normal homes, and would take the average family almost 6,700 years to pay it off, without interest, assuming they stuck to the 30% income rule.
Islands: The Truly Exclusive Abodes
Electronic gates and expansive lawns can help keep the public at bay, but when it comes to real privacy, nothing beats water. Little surprise, then, that many of the richest and most famous celebrities buy private islands to escape from the masses. For magician David Copperfield, for example, privacy comes in the form of Musha Cay, his 150-acre private island in the Bahamas. In 2006, he purchased the getaway for $50 million, or roughly the cost of 296 average homes. And even though Copperfield rents it out for a mere $300,000 per week, the average family could never afford that incredible price tag -- roughly six average annual household incomes.
Copperfield isn't the only celebrity with a private island, but Musha Cay's price tag was by far the highest. By comparison, the $15 million that Mel Gibson paid for Mago Island and the $3.5 million that Johnny Depp laid out for Little Hall's Pond Cay seem downright low rent. Then again, wealth is relative: It would take more than 1,000 years for the average family to pay off the mortgage on Gibson's getaway, and Depp's island costs as much as 20 average homes.
In fact, the comparative costs of Gibson's and Depp's homes drive home a key point: Whether one earns $49,777 per year or $49 million, wealth is relative. What may seem like a pauper's residence to one multimillionaire could be absolutely palatial to someone else.
Of course, the opposite is also true: Viewing even the most modest million-dollar residence through the lens of an average paycheck makes it clear just how much real estate separates average Americans from the Richistanis.