SAN FRANCISCO, Nov. 24, 2014 /PRNewswire/ -- Luxury home values continued to rise in San Francisco, Los Angeles and San Diego in the third 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 third quarter of 2014, the Index indicated the following:
- San Francisco Bay Area values gained 14.3% from the third quarter of 2013 and 3.8% from the second quarter of 2014. The average luxury home in the region is at an all-time high of $3.44 million.
- Los Angeles area values jumped 13% from the third quarter a year ago and 3.7% from the second quarter of 2014. The average luxury home in the area is at an all-time high of $2.61 million.
- San Diego area values were up 4.8% year-over-year and 1.5% from the second quarter of 2014. The average luxury home in San Diego is $1.98 million.
"Luxury home values in San Francisco and Los Angeles were quite strong, while San Diego values continued to appreciate but at a slower rate," said Katherine August-deWilde, President of First Republic Bank. "Price increases continue to be driven by low interest rates, limited inventory and a good economy. Luxury properties are routinely selling for over the asking price and often with multiple offers."
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. 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 jumped 14.3% from the third quarter a year ago and posted their sixth consecutive quarter of double-digit gains on a year-over-year basis.
In San Francisco, prices climbed due to continued demand. "The market throughout San Francisco was strong through the third quarter," said Malcolm Kaufman of Alain Pinel in San Francisco. "I see no tapering for the balance of the year. There are just not enough single-family homes for the expanding population. Developers cannot build fast enough to meet demand."
In Silicon Valley, the market remained very active. "Our third quarter was perhaps our strongest ever," said Pat Kalish of Alain Pinel in Palo Alto. "Inventory remains very low. Prices are up, and in some cases, are 50% higher compared to the third quarter last year. Multiple offers are the rule. Only rarely are we seeing single offers, and even those often exceed the list price."
In southern Marin, values also moved higher. "There are a lot of people vying for homes in the $2 million to $3 million range," said Ken Dara of Decker Bullock Sotheby's International Realty in Mill Valley. "Below that, the market is even crazier. Above $4 million, houses are moving, but there are fewer buyers. In the high end, the home has to be perfect."
Los Angeles Area Values
Los Angeles prices appreciated 13% from a year ago and have posted five consecutive quarters of double-digit gains year-over-year.
"On the Westside of Los Angeles, demand outstripped the supply of luxury homes," said Carolyn Johnson of Berkshire Hathaway HomeServices in Pacific Palisades. "The market is very tight. Multiple offers were common on homes perceived as a good value. Our inventory remains low, but overall confidence in the real estate market remains strong."
Herb Leary of Leary States in Malibu agreed. "The third quarter was strong across most markets from West L.A. to Malibu. Inventory is low and buyers are active in the luxury market. In Brentwood, Pacific Palisades and Malibu, prices are very strong and buyer interest is greatest for homes selling for $2 million to $5 million."
In beach communities, buyers appeared to be getting more selective. "Buyers are more particular about what they want," said John Capellaro of Coldwell Banker Previews International in Manhattan Beach. "Only the most well-prepared homes are seeing across-the-board price increases. Homes that are move-in ready, with views and are recently refurbished, are selling above the asking price with multiple offers. Buyers are far less willing to take on projects."
San Diego Area Values
San Diego values were up 4.8% year-over-year, but gains have been slowing on a year-over-year basis.
"It has been very quiet in all segments of the market, particularly the upper end," said Peggy Chodorow of Berkshire Hathaway HomeServices in La Jolla. "There is still a lot of demand, and inventory is low. We've seen the most activity for homes listing for $1.5 million to $2.5 million."
In Coronado, sales activity was at all-time highs. "Coronado is different than elsewhere in San Diego," said Scott Aurich of Pacific Sotheby's International Realty in Coronado. "This year, there will be close to 300 deals on the island, the most we've ever had. Prices are back to the peak of 2006 and 2007. There is a real scarcity of homes on the market. Properties that are well priced get sold quickly."
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, CoreLogic 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 (NYSE: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.
SOURCE First Republic Bank