SAN FRANCISCO, May 29, 2014 /PRNewswire/ -- Luxury home values increased in San Francisco, Los Angeles and San Diego in the first quarter of 2014 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 first quarter of 2014, the Index indicated the following:
- San Francisco Bay Area values climbed 12.5% from the first quarter of 2013 and 3.4% from the fourth quarter of 2013. The average luxury home in San Francisco is $3.17 million.
- Los Angeles area values rose 17.8% from the first quarter a year ago and 5.6% from the fourth quarter of 2013. The average luxury home in Los Angeles is $2.47 million.
- San Diego area values gained 13.5% year-over-year and 0.8% from the fourth quarter of 2013. The average luxury home in San Diego is almost $1.93 million.
"Luxury home values again posted strong, year-over-year gains in San Francisco, Los Angeles and San Diego," said Katherine August-deWilde, President of First Republic Bank. "Prices are being driven higher by limited inventory, robust demand for homes in California's more desirable communities and continued low mortgage interest rates."
First Republic Bank produces the Prestige Home Index each quarter with CoreLogic, 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
San Francisco values reached an all-time high of $3.17 million in the first quarter, exceeding the previous record set in the third quarter of 2007. The region experienced its fourth straight quarter of year-over-year, double-digit gains.
"It's an incredible sales market in San Francisco, Marin, San Mateo and Santa Clara counties," said Mark McLaughlin, President of Pacific Union Real Estate.
In San Francisco, demand for luxury homes has outstripped supply. "In the San Francisco, it's like deja vu all over again," said Malcolm Kaufman of Alain Pinel in San Francisco. "It is not unusual for prices to go 15% to 20% over list. There is very strong demand for homes."`
The luxury home market in the heart of Silicon Valley was also very active. "In Atherton, Menlo Park, Woodside and Portola Valley, demand is very strong for first-class properties that are well-priced," said Wendy McPherson of Coldwell Banker in Menlo Park. "Since the beginning of the year, we've seen inventory selling at a good pace. Overall, the number of sales is down, but it's still a sellers' market."
Los Angeles Area Values
Los Angeles prices reached an all-time high of $2.47 million in the first quarter, surpassing the previous high set in the second quarter of 2007. The region posted its third consecutive quarter of double-digit gains on a year-over-year basis.
Limited inventory has pushed values higher. "Prices in some Los Angeles neighborhoods have risen dramatically due to the very small number of homes on the market," said Michele Hall of Coldwell Banker in Brentwood. "This is especially true on the Westside of Los Angeles, including Beverly Hills, Bel Air, Brentwood, Pacific Palisades and Santa Monica. Buyer demand continues to be very strong and has been since the beginning of the year. Homes are routinely sold for more than the asking price often with multiple offers."
All-cash buyers continued to represent a significant amount of activity. "There is a tremendous amount of demand," said Scott Gibson of Gibson International in Brentwood. "Half of our sales in March were all cash. We have a lot of out-of-area buyers, both internationally and from outside the state. Prices will continue to rise as long as inventory stays low, the economy moves forward, and interest rates remain reasonable enough to give buyers confidence."
David Mossler of Teles Properties in Beverly Hills said the highest end of the luxury market was very strong. "Quality properties that sold in 2005 and 2006 for $10 million now sell for more than $20 million. In LA, prices have never been higher than they are today. After the recent increases, prices seem to have leveled for now, but the lack of inventory continues to create great demand."
San Diego Area Values
The 13.5% increase year-over-year was also the third straight quarter of double-digit gains in the region.
"It was a pretty strong first quarter with a lot of multiple offers, but the number of sales was down," said Peggy Chodorow of Berkshire Hathaway HomeServices in La Jolla. "Going forward, I think it's going to be a more balanced buyer-seller market, which is healthy."
Market activity in Rancho Santa Fe was slower in the first quarter. "There are too few buyers for the inventory we have," said Chuck Gifford of Coldwell Banker in Rancho Santa Fe. "Rising prices and qualifying conditions are making it more difficult for buyers to find the right property."
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 Canada 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, Core-Logic Case-Shiller 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
Founded in 1985, First Republic (FRC) and its subsidiaries offer private banking, private business banking and private wealth management, including investment, trust and brokerage services. First Republic specializes in delivering exceptional, relationship-based service, with a solid commitment to responsiveness and action. Services are offered through preferred banking or wealth management offices primarily in San Francisco, Palo Alto, Los Angeles, Santa Barbara, Newport Beach, San Diego, Portland, Boston, Palm Beach, 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. For more information, visit www.firstrepublic.com.
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