Luxury home values increased in San Francisco, Los Angeles and San Diego in the third quarter of 2013 compared to a year ago, according to the First Republic Prestige Home Index(TM) by First Republic Bank, a leading private bank and wealth management company.
San Francisco Bay Area Values
The double-digit, year-over-year gain in the region pushed luxury home prices over $3 million in the third quarter. Prices were last at that level in the first quarter of 2008.
“I’m seeing more investment in luxury homes than any time in my career,” said Steve Mavromihalis of Pacific Union in San Francisco. “Very specifically, it’s driven by location and amenities. Except for an unforeseen event, the real estate market for the best homes in San Francisco may experience a real run up because there is very little inventory. Compared to other world-class cities, San Francisco is still a relative bargain.”
In Silicon Valley, the luxury market was at all-time highs. “Demand continues to be very strong, and our inventory is still lagging,” said Anne King of Keller Williams Realty in Palo Alto. “This year, the percentage of all-cash buyers and foreign buyers surpassed last year’s. In Menlo Park and Palo Alto, the median price of a home is over $2.1 million. That says something about this market.”
In the Wine Country, prices continued to rise. “The luxury market in the Napa Valley is good and steady,” said Jim Perry of Pacific Union in St. Helena. “The Wine Country is a little different than the Bay Area because it is mostly second homes. The inventory here has been steadily bought down. If you have the right product, it will still sell quickly.”