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.
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.
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.
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.
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.
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.