Bay Area luxury homes hit highest price since 2008
Mike Calvey | SF Business Times | June 6 | link
Luxury home values in the Bay Area hit their highest level since the fourth quarter of 2008, with the latest figures marking the fifth consecutive quarter of year-over-year gains.
The value of luxury homes rose 8.7 percent in the first quarter from a year earlier and are up 3.2 percent from last year’s fourth quarter, according to the First Republic Prestige Home Index.
The average luxury home in the Bay Area is worth $2.82 million.
Los Angeles area values rose 7.1 percent from a year ago and 1.9 percent from the fourth quarter of 2012. The average luxury home in Los Angeles is worth $2.1 million.
San Diego posted more modest gains, with luxury home values there rising 2.8 percent from a year ago and 3.6 percent from the fourth quarter. The average home value in San Diego is $1.7 million.
“Luxury home prices rose strongly in the San Francsico Bay Area and Los Angeles, and continued to recover in San Diego,” said Katherine August-deWilde, president and chief operating officer at First Republic Bank, (NYSE: FRC) which produces its report on luxury home prices every quarter with Fiserv CSW, a provider of property valuation services to the banking industry.
“Limited inventory exists in many areas, and buyer demand is accelerating for properties in the most desirable neighborhoods. Many homes have received multiple offers and are selling over the asking prices,” August-deWilde said.
Those hallmarks of the Bay Area housing market was captured in a Financial Times report last week, looking at all the tech wealth flowing into real estate.
Janis Stone of TRI Coldwell Banker in San Francisco sees strong demand from cash buyers, looking for homes in the $3 million to $6 million range.
“We have very high demand and many cash buyers,” Stone said. “Fixers are selling for $1,000 a square foot in some locations.”
On the Peninsula, Menlo Park and Palo Alto continue to be very strong, especially old Palo Alto, said Monica Corman of Alain Pinel in Menlo Park.
Escalating home values are taking some by surprise.
In San Francisco’s popular Hayes Valley neighborhood, the Charles Dietle House sold last month for $3.37 million, or about 12 percent over the original asking price, according to the neighborhood blog, Hayes Wire. It was on the market for 42 days. The buyer paid for the mansion in cash.
“The sweet spot are homes priced from $1.5 million to $3 or $4 million,” Spindler said. She credits the strong demand not only to the new tech wealth but also to downsizing baby boomers opting for smaller homes after the kids move away.
What might be more disturbing for Bay Area residents harboring hopes of becoming San Francisco homeowners is the entry-level home that sold last month just a block away from the Dietle House. The Hayes Valley studio condominium sold for $482,000, according to Redfin.
“You’re buying a lifestyle,” quipped the real estate agent that sold the 483-square foot condo in 49 days.