The 10 Most (and Least) Expensive Zip Codes to Rent or Buy In, Ranked

In real estate, it's all about location, location, location. Your choice of a zip code can make a huge difference in how much you pay to buy a home, or what you'll shell out to rent a place. Forbes recently ranked the most expensive zip codes for renters and home buyers, based on median home prices for more than 28,500 zip codes. If you need a place to rent or you're in the market to buy, here's where you'll pay the most to call home. 

Top 10 Most Expensive Zip Codes to Rent or Buy

Altogether, the Forbes rankings cover 500 zip codes across the U.S. To simplify things, here are the top 10 most expensive zip codes, starting with the most expensive zip code first: 

1. 94027 - Atherton, CA: Median Home Price: $9,686,154
2. 33462 - Manalapan, FL: Median Home Price: $8,368,431
3. 94022 - Los Altos Hills, CA: Median Home Price: $7,755,000
4. 94301 - Palo Alto, CA: Median Home Price: $7,016,631
5. 94957 - Ross, CA: Median Home Price: $6,939,423
6. 11962 - Sagaponack, NY: Median Home Price: $6,852,692
7. 81656 - Woody Creek, CO: Median Home Price: $6,651,269
8. 90210 - Beverly Hills, CA: Median Home Price: $6,442,914
9. 10065 - New York, NY: Median Home Price: $6,415,146
10. 10013 - New York, NY: Median Home Price: $6,289,099

What Makes These the Most Expensive Zip Codes? 

Looking at the list of the top 10 most expensive zip codes, one obvious thing stands out. With the exception of Manalapan, Florida, and Woody Creek, Colorado, they're all located in California or New York. But what accounts for the high cost of real estate in these states?

The balance between supply and demand is one factor. When rental property and home inventories are tight, that's a natural driver of higher prices. In New York City, for example, demand routinely outpaces supply in Manhattan, where two of the top 10 most expensive zip codes are located.

A similar trend is developing in Brooklyn, where the median home price increased 4 percent year over year from the fourth quarter of 2016 to the fourth quarter of 2017. Nationwide, home values rose 7.6 percent in 2017 and are projected to increase by another 3.5 percent in 2018, according to Zillow. 

In California, supply and demand are also an issue, more so in some zip codes than others thanks to the tech boom. The median rent price in California is $2,650, but in Atherton, CA, the average monthly rent is $17,255. Located between Palo Alto and Redwood City, Atherton is prime Silicon Valley real estate. At one time, Facebook COO Sheryl Sandberg called it home before selling the property in 2014 for $9.25 million. 

Manapalan, Sagaponack, and Woody Creek could be viewed as the outliers in the top 10 ranking since they are considered smaller suburban locations. All three towns measure their population in the hundreds, rather than the thousands, offering a slower-paced, more relaxed feel than some of their other top 10 counterparts. Their scenic locations, paired with the scarcity of homes to rent or buy, have lent them an exclusivity that's resulted in higher median home prices, which continue to climb. 

The Least Expensive Zip Codes, Ranked

While some zip codes may only be in reach for high-net-worth individuals with a sizable income or extensive assets, there are just as many zip codes that prove more affordable for the typical renter or home buyer. But just where are they? 

Realtor.com analyzed homes in the 500 largest U.S. metro areas to pinpoint the cities and individual zip codes that offered the lowest median home prices. Here's how the top 10 compare to the most expensive zip codes:

1. 46953 - Marion, IN: Median Home Price: $45,000
2. 61832 - Danville, IL: Median Home Price: $59,900
3. 17901 - Pottsville, PA: Median Home Price: $60,000
4. 48708 - Bay City, MI: Median Home Price: $69,900
5. 43952 - Weirton, WV: Median Home Price: $85,000
6. 71601 - Pine Bluff, AR: Median Home Price: $25,200
7. 45801 - Lima, OH: Median Home Price: $79,900
8. 14904 - Elmira, NY: Median Home Price: $59,900
9. 66616 - Topeka, KS: Median Home Price: $61,000
10. 21502 - Cumberland, MD: Median Home Price: $94,900

As you can see, the numbers in these zip codes look very different. One of the common threads with many of these cities is a shrinking local economy, driven by the loss of jobs in the manufacturing and agriculture sectors.

With fewer jobs, there's less incentive for newcomers to move in and rent or buy homes, driving home prices down. Other cities on the list, such as Bay City, Michigan, were particularly hard hit by the housing collapse, and the housing markets here have yet to fully recover a decade later. 

Renting vs. Buying in High-End Zip Codes

If you're considering moving into one of the most expensive zip codes, there are some important things to consider aside from the median home sales or rental price. If you're buying, you also need to factor in property taxes in the area, as these can drive the cost of homeownership higher. With the reduction of the home mortgage interest deduction to $750,000 versus $1 million beginning in 2018, there's less of an incentive to buy. 

Property taxes aren't something to worry about when renting in one of the most expensive zip codes, but you should take a close look at rental supply and demand in a specific location. If demand is steadily increasing that could push rental prices even higher, potentially allowing for buying to become the more cost-effective choice.