Madison's 07940 ZIP code is one of the hottest real estate markets in the country, with a median listing price of $1,562,499 and homes drawing intense buyer competition, according to Realtor.com's annual rankings published Aug. 10.

The borough landed 77th on the site's list of 99 hottest U.S. ZIP codes, one of 12 New Jersey communities to make the cut. The rankings measure how quickly homes sell and how many online views each listing attracts, using data from January through June 2026.

The data signals what Summit-area residents already sense in a neighboring market: homes in the hottest ZIP codes nationally sit on inventory levels 60.5% below pre-pandemic norms, more than five times the 11.3% shortfall seen across the country. Buyers in those markets averaged 19.4% down payments and carried a median credit score of 766, well above the national averages of 13.1% down and a 747 credit score.

Prices outpacing paychecks

Steven Pressman, emeritus professor of economics at Monmouth University, told Patch that the ratio of home prices to income has climbed from about four times average income in the 1960s through the 1980s to more than seven times now. Housing consumes 40% or more of household income for many families, up from roughly 30% in earlier decades, Pressman said.

He attributed the pattern to a familiar trio: commuter demand, limited housing supply and zoning rules that restrict new density in established suburbs. Madison sits on NJ Transit's Morris & Essex Line, giving residents direct rail access to Midtown Manhattan.

Supply remains the core problem. Pressman said proximity to jobs and transit keeps driving prices higher in communities within commuting distance of New York City.

Well-capitalized buyers dominating

Hannah Jones, senior economist at Realtor.com, told CNBC the list "has really migrated from being bang for your buck, more affordable ZIP-code focused to established neighborhoods that offer value but tend to be higher price."

First-time homebuyer age reached 40 in 2025, and repeat buyers using equity from existing homes now dominate in the hottest ZIP codes, Jones said. The average 30-year fixed mortgage rate held near 6.3% through the first half of 2026, down from 6.8% a year earlier. That modest relief hasn't loosened inventory in places like Madison, where demand from financially prepared buyers keeps competition fierce.

How Madison compares

Among New Jersey's entries, Ridgewood ranked highest at No. 34 with a $1,647,000 median listing price. Glen Ridge placed 13th at $999,000, and Montclair came in 65th at $1,399,000. New Jersey's entries averaged a median listing price of about $1.01 million, more than double the $486,000 average in non-New Jersey markets on the list.

The Northeast and Midwest dominated the rankings for the fourth consecutive year, with the South and West shut out entirely. Realtor.com has published the hottest ZIP codes list annually; the site's methodology limits the rankings to one ZIP code per metro area.