Luxury Home Values Rise in the First Quarter
San Francisco, Los Angeles and San Diego Increase Year-Over-Year
SAN FRANCISCO--(BUSINESS WIRE)-- Luxury home values increased in San Francisco, Los Angeles and San Diego in the first quarter of 2013 compared to a year ago, according to the First Republic Prestige Home Index™ by First Republic Bank, a leading private bank and wealth management company.
In the first quarter of 2013, the Index indicated the following:
San Francisco Bay Area values jumped 8.7% from the first quarter of 2012 and 3.2% from the fourth quarter of 2012. The average luxury home in San Francisco is $2.82 million.
Los Angeles area values rose 7.1% from the first quarter a year ago and 1.9% from the fourth quarter of 2012. The average luxury home in Los Angeles is $2.1 million.
San Diego area values increased 2.8% year-over-year and 3.6% from the fourth quarter of 2012. The average luxury home in San Diego is $1.7 million.
"Luxury home prices rose strongly in the San Francisco Bay Area and Los Angeles, and continued to recover in San Diego," said Katherine August-deWilde, President and Chief Operating Officer of First Republic Bank. "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."
First Republic Bank produces the Prestige Home Index each quarter with Fiserv CSW Inc., a leading provider of automated property valuation services and home price metrics to U.S. financial institutions. Historical results of the Index, which has tracked luxury homes since 1985, are accessible at www.firstrepublic.com. First Republic Bank is an active lender in the luxury home market for primary residences and vacation homes.
Values in the first quarter were at their highest since the fourth quarter of 2008. Prices have risen for five straight quarters year-over-year.
Janis Stone said the San Francisco market returned to levels not seen since the top of the housing boom. "The difference between now and then is that there is very little inventory. We have very high demand and many cash buyers. Tech buyers are looking for homes in the $3 million to $6 million range. These properties are selling with multiple offers and way over asking. Fixers are selling for $1,000 a square foot in some locations."
In Silicon Valley, the market remained very active. "Demand for luxury homes is solid, but there is also more inventory," said Monica Corman of Alain Pinel in Menlo Park. "Menlo Park and Palo Alto continue to be very strong, especially old Palo Alto."
Values in the first quarter were their highest level since the third quarter of 2009. Prices have risen for four straight quarters year-over-year.
In Beverly Hills the market was very active. "The first quarter was on fire," said Billy Rose of The Agency in Beverly Hills. "Pricing in the first quarter eclipsed the previous highs, both in price per square foot and total price. The market was driven by real confidence in the economy, foreign buyers and wealthy people who no longer want to hold off buying homes. Pent-up demand and a lack of inventory resulted in true competition in the market."
In Malibu and Pacific Palisades, a lack of inventory put upward pressure on prices. "It's a seller's market," said Carolyn Johnson of Prudential California Realty in Pacific Palisades. "An open house generates about 100 eager buyers. Last year, people who wanted to buy thought there was going to be more inventory, but that hasn't materialized. People are realizing that it is time to get into the market. The economy and optimism are definitely on the upswing."
On the West Side of Los Angeles, the market was also very strong. "It's extraordinary what's happened," said Michele Hall of Coldwell Banker in the Brentwood West office. "On the West Side, we're up 15% to 20% compared to a year ago. We have multiple offers on many properties. It took off in October of last year and it hasn't stopped. All of a sudden, buyers want hard assets, and now we're seeing buyers from Europe."
Values in the first quarter were their highest level since the fourth quarter of 2010.
Cody Steele of Steele Realty in Cardiff said the market began to strengthen at the start of 2013. "In January and February, it turned into a seller's market, particularly for homes $4 million and under. There is a lot of money moving out of stocks into real estate and other tangible assets. We've seen many cash deals. It seems like there are about 20 buyers for every listing."
On Coronado Island, the market was improving. "The big money is coming off the sidelines, and it is going into real estate," said Scott Aurich of Sotheby's Pacific Coronado. "Our high-end market didn't fall that far because there weren't many sales. We're now just hitting our peak selling season. We're seeing more people looking to buy."
About The First Republic Prestige Home Index
The First Republic Prestige Home Index™ is the first statistical model of its kind customized to measure changes in homes valued at more than $1 million in key California urban markets. Some common features of luxury homes in the Index: 3,000 to 6,000 square feet, three to six bedrooms, and three to six bathrooms. San Francisco Bay Area properties include a cross-section of luxury homes in Alamo, Atherton, Belvedere, Danville, Healdsburg, Hillsborough, Lafayette, Los Altos, Los Gatos, Mill Valley, Moraga, Orinda, Palo Alto, Piedmont, Portola Valley, Ross, St. Helena, San Francisco, Saratoga, Sonoma, Tiburon and Woodside. Properties in Los Angeles represent a cross-section of luxury homes in Arcadia, Beverly Hills, Calabasas, La Cañada Flintridge, Encino, Los Angeles, Malibu, Marina del Rey, North Hollywood, Pacific Palisades, Pasadena, Playa del Rey, Santa Monica, Studio City, and the West Los Angeles enclaves of Bel Air, Brentwood and Westwood. San Diego properties represent a cross-section of luxury homes in Carlsbad, Coronado, Del Mar, Encinitas, La Jolla, La Mesa, Poway, Rancho Santa Fe, San Diego and Solana Beach. In producing the Index, Fiserv CSW Inc. draws upon its economic database and years of experience in tracking single-family home values; collects and cross-checks data from multiple sources; achieves a weighted balance of validation elements such as repeat sales, comparable sales and physical home characteristics; and combines this with First Republic's extensive local market knowledge.
About First Republic Bank
First Republic Bank (NYS: FRC) and its subsidiaries provide private banking, private business banking and private wealth management. Founded in 1985, First Republic specializes in exceptional, relationship-based service offered through preferred banking or wealth management offices primarily in San Francisco, Palo Alto, Los Angeles, Santa Barbara, Newport Beach, San Diego, Portland, Boston, Greenwich, Palm Beach and New York City. First Republic offers a complete line of banking products for individuals and businesses, including deposit services, as well as residential, commercial and personal loans. First Republic is a component of the S&P Total Market Index, the Wilshire 5000 Total Market IndexSM, the Russell 1000®, Russell 3000® and Russell Global indices and six Dow Jones indices.
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