California million-dollar home sales plunged last year to their lowest level in five years, the result of a bone-dry mortgage market for prestige-home financing, as well as a decline in the value of many homes just over the million-dollar threshold, a real estate information service reported.
A total of 24,436 Golden State homes sold for a million dollars or more last year. That was down 42.5% from 42,506 in 2007. It was the lowest sales count since 20,595 were sold in 2003. In 2006 the $1 million-plus total was 50,010, in 2005 it was 54,773, and in 2004 it was 36,990, according to MDA DataQuick. The San Diego-based firm tracks real estate trends nationally via public property records.
Total California home sales—including all price levels—increased 2.5% last year, to 393,703 from 383,748 in 2007. Of last year's sub-$1 million sales, at least 2,052 homes had previously sold for more than a million. One in sixteen homes sold for a million dollars or more last year; the year before it was one in nine.
"Discretionary spending in the housing market has pretty much been on hold the past fifteen months. The core of last year's distress was clearly in affordable areas that had a lot of turnover in 2005 and 2006. That distress could migrate up the price ladder if this recession proves nasty for high-income households," said John Walsh, DataQuick president.
"A lot of home sales in the upper half of the market have been on hold for months, waiting for financing," he said.
While the number of home purchase mortgages below the old $417,000 conforming limit increased by 21% last year, the number above decreased by 51%, DataQuick reported.
Statewide, there were 608 sales for more than $5 million last year, 386 sales were in the $4 to $5 million range, 963 in the $3 million range, 2,899 sales in the $2 million range, and the rest between $1 million and $2 million. The 608 sales for more than $5 million was a record high, up 7.6% from 565 in 2007.
MDA DataQuick is a division of MDA Lending Solutions, a subsidiary of Vancouver-based MacDonald Dettwiler and Associates. MDA DataQuick monitors real estate activity nationwide and provides information to consumers, educational institutions, public agencies, lending institutions, title companies and industry analysts.
The numbers include home sales where it could be determined from public records that there was a buyer, a seller, that money changed hands, and that there was a legal transfer of property ownership. Not included were property swaps, sales of multiple lots, sales where no price or loan was available, teardowns and large farm or ranch properties. Sales to companies and trusts were included.
The most expensive confirmed purchase was a 11,407 square-foot 6-bedroom, 10-bathroom Bel Air house built in 1926 which went for $38 million in October. The largest home was a 4-bedroom, 8-bathroom 20,000 square-foot house in Corona Del Mar in Orange County. The sales price was unavailable, but the April purchase was financed with a $17.6 million mortgage.
Newport Beach in Orange County, Ross in Marin County and Rancho Santa Fe in San Diego County were communities where virtually all home sales were in the million-dollar category.
Newly-built homes accounted for 2,933 of last year's $1 million- plus sales, down 52.7% from 6,203 for 2007. There were 2,362 condo sales in the million-dollar category, down 20.9% from 2,986 the year before. Most $1 million-plus condos were sold in San Diego, Los Angeles and San Francisco.
The median-sized million-dollar home was 2,494 sq.ft. with 4 bedrooms and 3 bathrooms. The median price per square-foot for all million-dollar homes was $569, down 3.3% from $588 in 2007. For the market as a whole, the square-foot median declined 40.7% from $317 in 2007 to $188 last year, although roughly half that drop was due to a significant shift in the types of homes selling, DataQuick reported.
Last year 5,243 Notices of Default, the first step of the formal foreclosure process, were recorded on homes that previously had sold for a million dollars or more. Trustees Deeds recorded, the actual loss of a home to the foreclosure process, totaled 1,612.
Around 24% of the $1 million-plus buyers paid cash, up from 14% in 2007. In the over-$5 million category, more than half of the purchases were cash. Of those who did finance their purchase, the median down payment was 30% of the purchase price. Lending institutions most willing to provide mortgage financing were Wells Fargo, Bank of America and Union Bank.
There are 8.51 million homes in California. Of those, 254,745, or 3%, are assessed for more than a million dollars by county assessor offices, DataQuick reported.