- Los Angeles area values dropped 0.7% from the fourth quarter of 2011 and declined 0.1% from the first quarter a year ago. The average luxury home in Los Angeles is now $1.96 million.
- San Diego area values increased 0.4% from the fourth quarter and rose 1.4% year-over-year. The average luxury home in San Diego is now $1.65 million.
- San Francisco Bay Area values climbed 2.9% from the fourth quarter and were up 4.2% from a year ago. The average luxury home in San Francisco is now $2.59 million.
Agents said the market was gaining momentum. “We’re seeing lots of activity right now,” said Billy Rose of The Agency in Beverly Hills. “Pent-up demand is a main driver. We’ve gotten to the point where people are reasonably confident that we’ve reached the bottom. I believe the market is actually underpriced right now.”Bennett Carr of Sotheby’s International Realty in Los Angeles agreed. “Pent-up demand and a desire for top-quality property is fueling a dramatic rebound in the sales and prices of A+ property. Today’s luxury buyers are better qualified than ever. They usually buy with cash and are not interested in compromising their standards, so they are paying up for a dwindling supply of the best properties.” Carolyn Johnson of Prudential California Realty in Pacific Palisades said buyer activity was accelerating. “It’s a vibrant market right now. We’re seeing many multiple offers and cash deals, including a lot of money from overseas buyers. People feel that prices have bottomed out and are going back up.” San Diego Area Values San Diego luxury homes rose in value for the third consecutive quarter. Market activity was increasing, although the higher end of the luxury market still had a surplus of homes. “We still have to get our inventory levels down to have pricing stability,” said Michael Taylor of Prudential California Realty in Rancho Santa Fe. “Under $2.5 million in Rancho Santa Fe, inventory is falling, and we’re starting to see price stability. In homes over $3 million, we still have a three-year supply. The good news is that buyers have more confidence that they are buying at or near the bottom of the market. Greater confidence is going to accelerate the reduction of inventory.” Sue De Legge of The Guiltinan Group in Rancho Santa Fe said the lower end of the luxury market was firming. “The market has picked up, especially in the $1 million to $2 million range. But it is going to take a while for prices to really rise in Rancho Santa Fe and La Jolla. There aren’t enough buyers to absorb all of the inventory.”
San Francisco Bay Area ValuesIn the Bay Area, prices experienced the largest year-over-year increase since 2006. “People who work for technology companies have a lot of money and want to live in San Francisco, and this has changed our market dramatically in the past two months,” said Lee Ann Monfredini of Pacific Union International in San Francisco. “It is the Facebook and Zynga effect. There is pent-up demand and not much inventory. It’s amazing.” In Silicon Valley, a lack of inventory and a growing number of buyers were putting upward pressure on prices. “Our inventory is very low, and we have strong demand. We have many buyers who work at technology companies, in addition to money coming from Asia. The hottest market is Palo Alto, and that is like dropping a pebble in the pond – it’s having a ripple effect across the area.” In Marin County, the market was also improving. “Prices are rising in the $2 million and $4 million range. For homes above $4 million, properties that have sat on the market are starting to go into contract, but only after much negotiation,” said Danielle Chavanon at Sotheby’s International Realty. “However, buyers are still very cautious, and overpriced properties are still staying on the market.” 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 BankFirst 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 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 Index SM, the Russell 1000®, Russell 3000® and Russell Global indices, and six Dow Jones indices. About First Republic Private Wealth Management First Republic Private Wealth Management is the investment management, trust and brokerage group of First Republic Bank. First Republic Private Wealth Management offers objective advice and fully customized solutions with the same level of exceptional client service that has been the hallmark of First Republic Bank for more than 25 years. First Republic has the flexibility to provide individuals, families, businesses, endowments, schools and non-profit organizations with appropriate choices that responsibly meet a client’s specific investment objectives. Securities Products and Services are offered by First Republic Securities Company, LLC - Member FINRA/SIPC. First Republic Securities Company and First Republic Investment Management are wholly owned subsidiaries of First Republic Bank. Unless otherwise disclosed, investments through First Republic Investment Management and First Republic Securities Company, LLC are not FDIC-insured, not bank guaranteed and may lose value.