Los Angeles, San Francisco and San Diego Luxury Home Values All Post Modest Quarterly Increases
Luxury home values notched modest gains in Los Angeles, San Diego and San Francisco in the third quarter ended Sept. 30 compared to the second quarter, according to an index released today by First Republic Bank.
Los Angeles area values rose 0.7 percent from the second quarter of 2011 and increased 2.5 percent from the third quarter a year ago. The average luxury home in Los Angeles is now $2.01 million, according to the First Republic Prestige Home Index. San Diego area values increased 1.1 percent from the second quarter but fell 3.9 percent year-over-year. The average luxury home in San Diego is now $1.63 million, according to the index. Bay Area values climbed 1 percent from the second quarter and declined 1.4 percent from a year ago. The average luxury home in San Francisco is now $2.53 million.
“Luxury home prices in many California communities increased due to low inventories, low interest rates and home prices that have declined over the past few years. This has improved the economics of investing in residential real estate,” said Katherine August-deWilde, president and chief operating officer of First Republic Bank.
“All three major metropolitan areas in California experienced gains in home prices in the third quarter, which is the first time that has occurred since the fourth quarter of 2010,” she said.
In the Los Angeles area, values have increased in three of the past four quarters. The highest end of the luxury market appeared to be the most robust, according to agents.
“For homes priced at $5 million and up, the market remains active,” said Jane Brill Graven of Coldwell Banker Beverly Hills East. “There are well- qualified buyers who are looking for properties at the very top end, and they have the upper hand. Owners are having to reduce prices to where the market is.”
In beach communities, the market was largely unchanged from a year ago.
“If we had more and better product, we would have had more transactions in the past 12 months,” said Barry Host of South Bay Brokers in Manhattan Beach. “Buyers with money are out there, but there is also a lot of uncertainty. Unless the news starts to settle, the market will continue to bump along.”
The First Republic Prestige Home Index measures changes in homes valued at more than $1 million in key California urban markets. Common features of luxury homes in the index include 3,000 to 6,000 square feet and three to six bedrooms and bathrooms.
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.
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