The Most and Least Expensive American Neighborhoods

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When purchasing a house, the crucial factor is its location. The geographic placement significantly influences the property’s value, exemplified by the substantial price contrast between a $1.3 million studio apartment in New York City and a spacious mansion selling for less than half a million in a serene rural town.

While it might be tempting to assume that every city apartment is exorbitantly priced or that homes in remote areas are exceedingly affordable, the reality is more nuanced. In any U.S. town or city, an opulent neighborhood might be in close proximity to another, where homes sell for considerably less than the national average cost per square foot of property, which stands at $244.

This led the analysts at American Home Shield to ponder: considering the price per square foot of the average local property, where can one find the least and most expensive neighborhoods to buy in the U.S.?

Key Findings

• The South of Market neighborhood in San Francisco claims the title of the most expensive in the U.S., with an average property cost of $5,415 per square foot.
• Predominantly, the top 20 most expensive neighborhoods in the country are located in California, Florida, and New York.
• In stark contrast, Homewood North in Pennsylvania secures the position of the least expensive neighborhood, where the average property is priced at $29 per square foot.
• Beyond Pennsylvania, some of the most affordable neighborhoods in the country are situated in Ohio, Missouri, and Indiana.

The Most Expensive Neighborhood per Square Foot

Neighborhoods in California, Florida, New York, Hawaii, and Washington consistently rank among the most expensive states to reside in. However, pockets of high-cost real estate persist in every corner of the country.

Leading the list in Massachusetts is The Seaport, a waterfront neighborhood where the average property commands a steep price of $1,725 per square foot. Over the last few decades, this area has witnessed the transformation of once-empty wharves and lots into upscale apartments, stores, and restaurants. The allure of The Seaport has attracted a community of residents with a median income of $167,000.

For beachfront towns such as Fenwick Island in Delaware and Bay Head in New Jersey, top prices are the norm statewide. Meanwhile, in Downtown Asheville—where boutique galleries seamlessly blend with hiking trails and other outdoor recreational opportunities—the average home price reaches $659 per square foot, making it the most expensive neighborhood in North Carolina.

In San Francisco’s South of Market neighborhood, commonly referred to as SoMa, the average property commands a staggering $5,415 per square foot, making it the most expensive neighborhood in the United States. Nestled just south of Market Street, this area boasts the presence of billion-dollar tech giants such as Airbnb and Uber, contributing to a median household income of $104,440.

The Least Expensive Neighborhood per Square Foot

In various neighborhoods throughout the United States, the cost of buying property is considerably more affordable. The average home price in Homewood North, Pittsburgh, Pennsylvania, is only $29 per square foot, making it the least expensive neighborhood in the US. The median household income in this area is $29,694, representing a 46% deviation below the national average. Another Pittsburgh neighborhood, Beltzhoover, also secures a spot on the list with an average cost of $38 per square foot.

The majority of the other affordable neighborhoods are situated in the Rust Belt states of Illinois, Indiana, Michigan, Missouri, and Ohio, attracting younger generations seeking more economical housing options. Ranking second overall is Downtown Gary in Indiana, where the average home is priced at $32 per square foot. The decline in local industry since the 1960s has led to a significant population decrease, with approximately a third of Gary’s properties estimated to be vacant today.

The Most and Least Expensive Neighborhoods in the Largest U.S. Cities

The real estate scenery across the nation showcases remarkable diversity. Notably, in major U.S. cities such as New York, San Francisco, and Los Angeles, neighborhoods like Manhattan, Bel Air, and Rush-Division are recognized as the most expensive, while neighborhoods like Hartsdale, South Park, and South Shore emerge as the most affordable options within these urban centers.

New York City

Much like San Francisco, New York City holds a reputation as one of the world’s most expensive places to reside. While many locals opt for renting, even the smallest apartments in the city can exceed a thousand dollars per month. The trendy West Village stands out as the most expensive neighborhood for buying, with an average property price reaching $2,680 per square foot, attracting numerous celebrities in this historically bohemian enclave.

For those with a more budget-conscious approach, Hartsdale offers a more affordable option, where the average property cost is just $343 per square foot—the city’s least expensive rate. Situated over 20 miles north of Manhattan in the town of Greenburgh, Hartsdale provides a diverse range of housing options, from one-bedroom apartments to five-bedroom homes on spacious plots, as highlighted by The New York Times.

Los Angeles

Los Angeles, renowned for its association with the rich and famous, boasts Bel Air as its most expensive neighborhood for property purchases—an exclusive gated community where the average square foot comes with a hefty price tag of $1,318. To showcase the luxuriousness, the local Casa Encantada mansion is currently being sold for a staggering $195 million (as of December 2023), which equates to an astonishing $4,875 per square foot for its approximately 40,000 square feet.

South Park is a neighborhood in Los Angeles located about half an hour’s drive from Bel Air. It has the least expensive properties in the city, with an average square foot price of $419. Nestled in the heart of downtown, this location suffers from noise pollution and a crime rate 492% higher than the national average.

Chicago

Chicago’s Rush & Division claims the title of the city’s most expensive neighborhood for home purchases, with the average property priced at $615 per square foot. Nestled in the Windy City’s historic Gold Coast district—one of the most affluent neighborhoods in the U.S.—this area boasts an average household income of a comfortable $125k. The renowned Magnificent Mile also ranks high at $507 per square foot, hosting luxury stores, high-end restaurants, and iconic landmarks.

In contrast, the lakefront community of South Shore stands as the least expensive neighborhood in Chicago, with properties costing a mere $98 per square foot. According to the South Shore Housing Data Project, the community has a higher poverty rate (30%) compared to the city of Chicago (17%) and continues to house the highest number of households renting with Housing Choice Voucher subsidies in the city.

Philadelphia

In Philadelphia, the Center City West neighborhood claims the title of the city’s most expensive for home purchases, with the average square foot priced at $668. This vibrant area, adorned with upscale shops, restaurants, and museums, is nestled near Fitler Square and Rittenhouse Square—two neighborhoods ranking second ($623) and third ($526), respectively, in our list below.

Meanwhile, in other parts of the City of Brotherly Love, property costs are notably more affordable. Leading the way is Upper Kensington at $81 per square foot, followed by Tioga at $86 per square foot—a neighborhood where development has lagged compared to other city areas, and the poverty rate has remained around 35% for the past decade.

Houston

Houston boasts one of the highest populations of millionaires in any U.S. city, reflected in the matching property prices of certain neighborhoods. Leading the list is River Oaks, a centrally located community where the average home commands $481 per square foot. Established in the 1920s by two brothers, this affluent neighborhood became a national model for planned communities, gradually attracting wealthier residents over the years.

On the other end of the spectrum is Westwood, where the average property is priced at $105 per square foot. Following closely is Greenspoint, at $106 per square foot, recognized as the fourth-most dangerous neighborhood in Houston in terms of local crime rates, and home to a significant low-income population.

The Methodology Behind This Study

To identify the most and least expensive American neighborhoods per square foot, American Home Shield conducted a thorough analysis using data from Homes.com, encompassing over 20,000 neighborhoods. Rankings were determined by the average sale price per square foot as of December 2023. To ensure robust data, neighborhoods with fewer than 10 sales in the previous 12 months were excluded from the evaluation. The analysis excluded five states—Montana, South Dakota, Wyoming, North Dakota, and Virginia—because of a lack of neighborhood data.

How to Select the Perfect Location for Your Home Purchase

They say that when it comes to finding the right house, the key is in the “location, location, location.” But where should you begin? Check out the American Home Shield’s team tips on selecting the ideal location for your next home.

1. Align with Your Budget: Begin your home search by assessing your budget. If glamorous neighborhoods like LA’s Bel Air or New York’s West Village are beyond your financial reach, it’s practical to focus on areas that fit your budget. Research local house prices to pinpoint a neighborhood that aligns with your financial constraints.
2. Map Your Commute: Factor in your work location when evaluating potential neighborhoods. Assess the commute from your potential future neighborhood to your office—considering modes of transportation, costs, and time. A lengthy and challenging daily commute can significantly affect your overall living experience.
3. Evaluate Nearby Amenities: Living in isolation may not align with everyone’s dream home. When exploring a new neighborhood, examine the local amenities. Prioritize features that matter to you, whether it’s proximity to a mall, a children’s park, or easy access to major highways.
4. Explore Local Schools: For those with children or future family plans, consider the quality and proximity of local schools. Assess the distance from your home to the school and the time it would take for daily drop-offs and pick-ups. If your children will be walking to school, benefiting from ample fresh air and exercise opportunities, you might prefer to reside near a school, allowing for safe and walkable routes for your kids.
5. Examine Crime Rates: While it’s an uncomfortable topic, local crime rates are a crucial factor in choosing a residence. Websites like AreaVibes provide statistics on neighborhood crime rates, offering insights into the types of crimes committed and comparisons with other areas.

When it’s time to visit a potential home, dedicate a day or even a weekend to explore the local area. In-depth research about the neighborhood, including its amenities, schools, and safety, will facilitate a more informed decision when it’s time to make an offer.