Luxury home values increased in San Francisco, Los Angeles and San Diego
in the second 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 second quarter of 2013, the Index indicated the following:
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San Francisco Bay Area values climbed 10.9% from the second quarter of
2012 and 5.0% from the first quarter of 2013. The average luxury home
in San Francisco is $2.9 million.
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Los Angeles area values rose 6.1% from the second quarter a year ago
and 3.3% from the first quarter of 2013. The average luxury home in
Los Angeles is $2.1 million.
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San Diego area values gained 8.0% year-over-year and 4.9% from the
first quarter of 2013. The average luxury home in San Diego is $1.7
million.
“This was one of the best quarters in recent history for California
luxury home prices in First Republic’s urban, coastal markets,” said Katherine
August-deWilde, President and Chief Operating Officer of First
Republic Bank. “Limited inventory and growing demand from both U.S. and
international buyers are driving the market. Many properties generated
multiple offers. It was a very strong quarter.”
First Republic Bank produces the Prestige Home Index each quarter with
Core-Logic Case-Shiller, 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 10.9% gain year-over year was the largest increase in values since
the fourth quarter of 2005. San Francisco values are now the highest
since the fourth quarter of 2008 and are approaching the all time highs
of 2007.
In San Francisco, the market was strong. “It’s a healthy, solid market.
If people want a property, they will pay big numbers for it,” said Val
Steele of Sotheby’s International Realty in San Francisco. “We’re seeing
very strong demand and a lack of inventory. The luxury market will
continue to do well here because San Francisco has it all: It is an
international city and we offer great value compared to places like
Shanghai, London and Hong Kong.”
In Silicon Valley, there was continued robust demand for luxury homes.
“We have two major buyer pools: successful people in the technology
business and international buyers from China,” said Ken DeLeon of DeLeon
Realty in Palo Alto. “Both groups are quite bullish and many are looking
at properties in the $5 million to $10 million range. They feel very
confident. You’re beginning to see multiple offers, even in the upper
end.”
In the East Bay, the market continued to recover. “The market is
definitely picking up,” said Laura Abrams of Coldwell Banker in Orinda.
“The high end is moving, but properties are selling at lower prices.
People are getting great deals. I am cautiously optimistic.”
Los
Angeles Area Values
Values on a year-over-over basis have now increased for five straight
quarters.
On the West Side of Los Angeles, the market was very strong. “In Bel
Air, Beverly Hills and Malibu, properties above $5 million were up 10%
to 12%,” said Mike Eisenberg of Keller Williams in Los Angeles. “I think
we would have a bubble in the making if it were just local buyers, but
we’re seeing a lot of multinational investors. Los Angeles values are
inexpensive compared to other metropolitan areas around the world.”
Michael Collins of Coldwell Banker Previews in Los Angeles agreed. “If
something is extraordinary, it will sell for a premium. People want to
be in the Palisades, Brentwood, Bel Air and Beverly Hills, and they will
pay up. I’ve never see such astronomical prices in my 27 years in the
business.”
In Orange County, pent-up demand was driving the market. “The first and
second quarters were excellent,” said Jim Turco of Surterre Properties
in Newport Beach. “We had low inventory and high demand. We were seeing
multiple offers and deals are being done more frequently.”
San
Diego Area Values
The 8% increase year-over-year was the largest since the fourth quarter
of 2005, when prices spiked 13.3%.
“Anything up to $3 million is selling quickly, but homes over that price
aren’t selling as rapidly,” said Judy Corrente of Pacific Sotheby’s
International Realty in La Jolla. “There is not a lot of product.
Overall, it is looking very promising.”
Amy Green of Coastal Premier Properties said the market was doing well.
“There is more momentum, more transactions, and a lot of cash deals,
especially in the high end. It’s very encouraging, compared to last
year. There are a lot of move-up buyers and many overseas buyers from
Asia and Europe.”
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) is a full-service bank specializing in
private banking and private business banking. The Bank's wealth
management affiliates offer trust, investment consulting and advisory
services. 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. For
more information, visit www.firstrepublic.com.
Copyright Business Wire 2013