In California, the value of luxury homes is on the way up. The prices are climbing in San Francisco, Los Angeles and San Diego.
During the 3rd quarter of 2012 when compared to last year, the prices of luxury homes in the major metropolitan markets in California rose.
The Index shows that in the San Francisco Bay Area home values rose 8.1 percent from the figure seen in 2011 and was a 2.4 percent over the second quarter of 2012. The average price in San Francisco is $2.73 million.
In the Los Angeles area, home values rose 1 percent from the third quarter of 2011 and declined a small 0.8% from the second quarter of 2012. The average price of a luxury home in Los Angeles is $2.02 million.
In the San Diego area, home values rose 2.2 percent year-over-year and increased 0.8 percent from the second quarter of 2012. The average luxury home price in San Diego is $1.66 million.
"Luxury home prices were particularly strong in the San Francisco Bay Area during the third quarter of 2012," President and Chief Operating Officer of First Republic Bank, Katherine August-deWilde stated and went on to say, "The Bay Area economy is healthy, inventory is limited, and multiple offers are increasingly the norm. Values in Los Angeles and San Diego are rising, and some neighborhoods are experiencing strong demand. Historic low interest rates have resulted in an elevated level of activity in luxury markets throughout California."
San Diego Area Home Values
San Diego luxury homes values is the growing trend with a higher value than what was seen a year ago. Prices in the area have increased for the last three quarters on a year over year basis, which includes a 2.2 percent gain during the third quarter when compared to last year.
Michael Taylor of California Prudential Realty in Rancho Santa Fe explained, for properties over $3 million, sales activity is picking up. "We have had a higher number of units sold this year than last year for homes over $3 million," and went on to say, "To me, that indicates fear has been wrung out of the market. People are now willing to spend more to buy a home, and they’re getting significantly more home because of the recent price declines. The perception is that we are at the bottom of this market."
Farid Khayamian of Bluxen Real Estate in La Jolla stated, "There are a lot of people who want to buy," and went on to explain, "We see multiple offers everywhere, particularly when the property is priced right. A year ago, there was more inventory due to short sales and foreclosures, but that has dried up. Right now, you have to buy at the asking price. In January, we will have more inventory and possibly lower prices."
San Francisco Bay Home Values
The San Francisco Bay Area reported its second consecutive quarter of gains on a year-over-year basis. The 8.1 percent year-over-year rise in the third quarter of 2012 was the highest since the first quarter of 2006.
Malcolm Kaufman of McGuire Real Estate in San Francisco stated, "Prices for luxury homes have been strong all year," and went on to say, "There is limited inventory, the economy here has returned better than anywhere in the country, and employment is up. Lots of money is being spent on $5 million homes and $10 million homes. For some, it feels like 2005 again."
In Silicon Valley, Pat Kalish of Intero Real Estate Services in Menlo Park stated, "People have secure jobs and stable incomes," and went on to say, "Except for the highest end of the luxury market, there is strong competition for properties. We have scarcity of homes, historic low interest and an optimistic outlook. When you are out in the market, you feel the optimism."
In the Marin County, Pat Montag of Decker Bullock Sotheby’s International Realty in Mill Valley said, "Marin has not seen the increases that have happened in Menlo Park or San Francisco," and went on to say, "We typically lag a quarter behind San Francisco. We did see an uptick at the end of third quarter in the $3 million to $5 million range. Many people are still waiting until they see what happens in Washington D.C. in the first quarter."
Los Angeles Area Home Values
In the Los Angeles area home value rose 1 percent from last year but did drop just a bit from the second quarter
Dan Weiser of Coldwell Banker Beverly Hills South stated, "On the west side of Los Angeles, inventory is scarce and demand is high. We’re back to 2007 sales volume. Prices are probably within 10% of the height of the market. Sellers are getting incredible prices for properties in the highest end of the luxury market."
Michele Hall of Coldwell Banker in Brentwood explained, "New construction is flying off the shelf, with all cash and multiple offers. We’re seeing multiple offers in every price range, and there are fewer foreclosures and short sales. Inventory opened up, but was then snapped up."
In Santa Barbara, Joanne Schoenfeld of Santa Barbara Living Real Estate Brokerage explained, "The luxury market is very strong in Santa Barbara and Montecito," and went on to say, "There is a lot more activity and closed sales than last year. Prices continue to rise slightly, and I don’t see them going down any time soon. It’s a good, strong market."