Real LI

While its median home sales price is $2,488,987, Water Mill is "part of the town of Southampton but it lacks its neighbors' snooty airs and prides itself on being more laid back," according to BusinessWeek.com in its list of the "Most Expensive Small Towns in America." The article goes on: "While it may not be the quaint little village it had once been, it still boasts one of the best farm stands in the area -- the Green Thumb -- and is only a short bike ride from Flying Point Beach."

In Nassau, the magazine named Sands Point for its "spectacular views looking over Long Island Sound ... half-hour train ride from Penn Station" and median home sales price of $2,226,426.

The communities "were determined by locating the towns in the U.S. with the highest median home sale prices and the smallest year-round," according to the article.