Where the richest people live (© Ralf-Finn Hestoft/CORBIS; Ilene McDonald/Alamy)

Kenilworth, Ill., left, and Naples, Fla., include the most expensive blocks in their respective states. // © Ralf-Finn Hestoft/CORBIS, Ilene MacDonald/Alamy

Beverly Hills, Calif., famously has some of the country's most valuable real estate. On the western end of the city, between the Los Angeles Country Club and North Beverly Drive, the median home value is about $3 million, according to real-estate website NeighborhoodScout.com, and many properties cost far more. This posh neighborhood in the 90210 ZIP code is lined with pristine single-family homes, most with at least four bedrooms. (Bing Cube: View photos of Beverly Hills)

Streets need not be lined with big estates to have high home values. On the opposite coast, in Manhattan, an area bordering the east side of Central Park from 70th Street to 77th Street, between Park Avenue and Fifth Avenue, contains homes with a median value of $2.8 million. In comparison, the median home value citywide is about $779,000, according to NeighborhoodScout's estimates. Unlike Beverly Hills, the area is mostly stacked with luxury apartments, according to data from the Census Bureau's 2005 to 2009 American Community Survey.

Size and style can determine much of a home's value, but other factors can weigh more heavily. In one city, the prices of similar homes can differ widely depending on the area — and even the street — in which they are located. The two key drivers of value are access to work opportunities and access to amenities, says Andrew Schiller, founder and chief executive of NeighborhoodScout.com. A few streets' distance can make a difference in perceived proximity to school districts, recreational amenities and transportation routes.

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Access to jobs
Areas with the most expensive real estate in any city are often close to high-paying jobs. Within them, the most expensive streets typically have larger homes that are closer to local amenities. Affluent homebuyers may seek big homes with views in good school districts. For primary residences, however, "access to opportunity is so significant that even if homes are smaller, the values (in an area) can still go up," Schiller says. "People will put up a lot to make a lot of money and support their families."

Slide show:  America's most expensive blocks

To determine the most expensive neighborhood in each state, NeighborhoodScout estimated the median home values in the third quarter of 2010 for about 62,000 census tracts, or county subdivisions, across the U.S. The ranking includes only places with more than 800 residents and with at least one-fourth of properties occupied by owners, rather than renters. This excludes certain subdivisions and small towns with high property values.

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In addition to parts of Beverly Hills and Manhattan's Upper East Side, other expensive places include:

  • Port Royal in Naples, Fla., which has waterfront homes along the ocean, canals and bay;
  • Alpine, N.J., a suburb of Manhattan that attracts many celebrities and business executives; and
  • The Golden Triangle section of Greenwich, Conn., where incomes are among the nation's highest.

Slide show:  Priciest suburbs in the 10 biggest states

Values range from $266,293 in Fargo, N.D., to more than $3 million in Beverly Hills. In nearly every state, the most expensive areas are near water, hills or mountains, parks or country clubs.

Looks matter in second-home markets
Although Beverly Hills and Manhattan provide access to urban centers with high-paying jobs and amenities, just one of these factors props up home values in other exclusive neighborhoods.

Buyers in second-home markets such as Port Royal; Block Island, R.I.; or Big Sky, Mont., for example, pay a premium for amenities such as views, a waterfront and outdoor recreation. Some of the most expensive properties in Block Island are on the waterfront.

"People are not moving there to get great jobs," Schiller says.

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High-end markets tend to hold their values better than average ones, but even the most exclusive areas are vulnerable to economic distress. Arizona's affluent community of Paradise Valley, for instance, has not been hit as hard as the rest of the state because many residents withstood the stress of the recession, says Bob Hassett, a broker at Russ Lyon Sotheby's International Realty. Still, values in the area have declined by more than 25% in the past two years, NeighborhoodScout says.

Amenities can lose value
Schiller says that places relying on amenities to sustain home values can be more vulnerable to price drops during an economic downturn than those that are near job centers. For instance, NeighborhoodScout estimates that home values in Port Royal have dropped about 21% in the past two years, compared with a relatively minor dip of 5.52% in Chevy Chase Village, Md., a wealthy suburb of Washington, D.C., one of the most stable metro job markets.

Exclusive communities migrate over the years as opportunities shift to new places. Beverly Hills did not develop until movie stars began moving there in the early 1900s, according to the city's website. Although the most expensive place in Texas is the Afton Oaks-River Oaks section of Houston, whose median home value is about $1.7 million, Schiller predicts that prices in Austin, Texas, will rise as government activity, job growth and the University of Texas attract more homebuyers to the area.

Neighborhoods near Austin and other emerging cities may not be expensive now, but the right combination of amenities and job opportunities might one day push them to the top of the price ladder.

View the most expensive block in each of the 50 states at Businessweek.com.

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