Prices Post Strong Year-Over-Year Gains; San Diego Values Were Flat
Luxury home values increased in San Francisco and Los Angeles, and
remain largely unchanged in San Diego in the fourth quarter of 2012
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 quarter that ended Dec. 31, 2012, the Index indicated the
following:
-
San Francisco Bay Area values rose 8.4% from the fourth quarter of
2011. The average luxury home in San Francisco is $2.73 million.
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Los Angeles area values rose 4.4% from the fourth quarter a year ago.
The average luxury home in Los Angeles is $2.06 million.
-
San Diego area values decreased 1.4% year-over-year. The average
luxury home in San Diego is $1.64 million.
“Luxury home prices rose strongly in the San Francisco Bay Area and Los
Angeles this past year,” said Katherine
August-deWilde, President and Chief Operating Officer of First
Republic Bank. “Growing demand from buyers, low mortgage rates and a
lack of inventory continued to put upward pressure on values. Multiple
offers are common in many high-end neighborhoods as buyers compete for a
small number of attractive properties.”
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.
San Francisco Bay Area Values
The Bay Area posted its fourth consecutive quarter of healthy gains on a
year-over-year basis.
In San Francisco, Mary Lou Castellanos of Sotheby’s International Realty
said buyers had limited choices in the fourth quarter. “There is no
inventory on the market, particularly for homes priced between $3
million and $5 million. A lot of money is pouring in from Asia and
Silicon Valley. Prices are back to where they were at the beginning of
2008.”
In Silicon Valley, prices were at levels not seen since before the
financial crisis. “We saw huge moves at the end of 2012,” said Mike
Dreyfus of Dreyfus Properties in Palo Alto. “We saw local neighborhoods
up as much as 20% year-over-year, and it’s continuing into this year.
Inventory is zero. Multiple offers are common. There has been a run on
high-end homes and land. We have blown past the highs of 2008.”
In Marin County, the market was continuing to strengthen. “Growing
demand is driving the market,” said Brad Garsten of Frank Howard Allen
in Greenbrae. “We are starting to see some multiple offers, although
that is the exception. Buyers remain picky, and sellers are demanding a
good price. Inventory remains low.”
Los Angeles Area Values
In Los Angeles, year-over-year values posted their largest increase
since the second quarter of 2007.
Jane Brill Gavens of Coldwell Banker Beverly Hills South said the market
is very active. “Every listing I put out has multiple offers. Every
listing I make an offer on has multiple offers. Low inventory and
pent-up demand, combined with low interest rates, high liquidity and
foreign buyers, have created a perfect storm for a sellers’ market.”
In Pasadena, Maureen Hollingsworth of Sotheby’s International Realty
said the market was strong. “Last quarter there was little inventory,
and very good homes went for very high prices. More inventory is now
coming onto the market, and prices are approaching close to where they
were at the peak. Our market never went down very much.”
In Manhattan Beach, Barry Host of South Bay Brokers said the scarcity of
inventory was driving prices. “We have one of the lowest levels of
inventory that I’ve seen. More buyers are in the market, and that is
putting pressure on home prices. We’ve had a number of multiple offers
recently. We are also seeing many all-cash offers.”
San Diego Area Values
San Diego luxury homes were down slightly in the fourth quarter and
year-over-year. Agents attributed the decrease to the seasonal holiday
slowdown, but said buyer interest was picking up.
“Our clients think now is the time to buy,” said Peggy Chodorow of
Prudential California Realty in La Jolla. “They believe the market
bottomed out a year ago. Interest rates are good, and many say it’s time
to get in. In particular, the high end of the market is starting to
move.”
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 (NYSE: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.