Where the Rich (Still) Liveby
A visitor to Brookville, N.Y., can quickly forget that the tiny village is just off the Long Island Expressway and only 25 miles from midtown Manhattan.
The village on Long Island's fabled Gold Coast in Nassau County, where F. Scott Fitzgerald set his 1925 novel The Great Gatsby, is a tranquil place with horse paths and stately mansions hidden behind trees and fences.
Residents move here for the fantastic schools, the pastoral setting, and the privacy. It has few sidewalks, no shops or other commercial development of any kind, and no gathering places—other than churches, temples, and country clubs, such as the nearby Piping Rock Club. The closest post office is miles away.
Privacy is particularly important for Brookville's most famous current resident, Jennifer Lopez, who otherwise can't easily escape the paparazzi.
And the town does its best to enforce that privacy. "There is no parking on any street in Brookville," said Mayor Caroline Bazzini. "So in order to come and be here in Brookville, you need to know the people."
Brookville topped BusinessWeek's list of America's 25 wealthiest towns, according to an analysis by Little Rock's Gadberry Group. We ranked the towns based on the average 2008 net income and 2008 net worth of their residents. Brookville had an average net worth of $1.67 million—the highest on our list. Its average annual income of $328,000 was the nation's seventh-highest. Atherton, Calif., which has the highest net income in the country, came in second. It's the home of Google's (GOOG) billionaire CEO Eric Schmidt and Charles Schwab, the founder of the brokerage of the same name (SCHW).
In fact, while the wealthiest towns are found in a number of states across the country, there was, perhaps unsurprisingly, a fair amount of clumping. For example, nine towns on Long Island's North Shore made the list: Brookville, Lloyd Harbor, Munsey Park (Manhasset), Muttontown, North Hills, Old Westbury, Oyster Bay Cove, Roslyn Estates, and Sands Point.
One important point to make is that a number of towns, such as Florida's Jupiter Island or the village of Southampton on Long Island, failed to make the cut because many of their wealthiest homeowners are not year-round residents, but rather only seasonal visitors and as such are not incorporated on the tax rolls.
Larger communities, such as Greenwich, Conn., or Malibu, Calif., are too large, and the median wealth is diluted by many less affluent residents who live there. Some enclaves, such as Bel Air, Calif., aren't stand-alone towns. Bel Air is part of the city of Los Angeles.
Small Is Beautiful
The towns that made the list all had fewer than 10,000 households. But some of these places are well-known just because they're small. The Chicago suburb of Kenilworth, Ill., which ranked fourth on the list, is considered the Midwest's wealthiest town. Other places aren't well-known outside of their local area. You might never have heard of the Piney Point Village in the Houston area, but it has long been home to many of the area's energy tycoons and business owners, as well as former Yankees pitcher Roger Clemens.
It's important to note that the income and net worth data were collected before the economy collapsed at the end of 2008. The residents of these affluent enclaves are now feeling the pain of the recession. Wall Street executives have lost jobs, retirees have seen their investments shrink, and over-leveraged real estate developers are struggling to unload sparkling new homes.
The rich are having to make tough decisions about whether to pull children out of private school, cancel country club memberships, and postpone car purchases and vacations. But unlike most Americans, the newly downsized wealthy have large severance packages and savings to live off of.
Until recently, luxury homeowners were largely protected from the housing downturn because the market had few subprime borrowers and because wealthy buyers had access to ready cash. But the economic crisis is changing that. In the Los Angeles area more multimillion-dollar homes are listed than a year ago, fewer are selling, and prices are dropping, said Mark David, who writes the Real Estalker, a celebrity real estate blog.
In the Beverly Park gated community in the hills above Los Angeles, 8 or 9 houses out of the approximately 50 are now listed on the open market, said David. A developer has dropped the listing price for a new Beverly Park mansion from $49 million to about $31.5 million, he said.
David wonders why people would be selling in an environment like this unless they had to.
"Rich people are no different from middle-class people," he said. "Some rich people have all kinds of money and can weather the storm even if they have to cut back on expenses. But people who…have a lot of debt can find themselves in trouble."
Click here to see the 25 Wealthiest Towns in America.