Los Angeles, San Diego and San Francisco All Drop For Second Straight
Quarter
SAN FRANCISCO, May 19 /PRNewswire/ -- Luxury home prices in Los
Angeles, San Diego and San Francisco all posted modest declines in the
first quarter of 2008, according to the First Republic Prestige Home
Index(TM) by First Republic Bank, a leading provider of private banking,
private business banking and wealth management services.
In the quarter ended March 30, 2008, the Index indicated the following:
-- Los Angeles area values decreased 2.2% from the fourth quarter of 2007
and 3.7% from the first quarter of 2007. The average luxury home in
Los Angeles is now $2.35 million.
-- San Diego area values slid 2.2% from the fourth quarter of 2007 and
4.9% from the first quarter of 2007. The average luxury home in San
Diego is now $2.06 million.
-- San Francisco Bay Area values dropped 0.8% from the fourth quarter of
2007, but were up 2.9% from the first quarter of 2007. The average
luxury home in San Francisco is now $3 million.
"Values of luxury homes in California have declined slightly in price
after many years of strong appreciation," said Katherine August-deWilde,
President and Chief Operating Officer of First Republic Bank. "However,
even with some modest price declines, there is still demand for attractive
properties in the most desirable communities. The strongest markets are the
best neighborhoods in San Francisco, desirable close-in suburbs and upscale
coastal communities. The higher end of the luxury market is the most
active."
First Republic Bank produces the Prestige Home Index each quarter with
Fiserv CSW Inc., a leading provider of automated property valuation
services and home price metrics to U.S. financial institutions. Historical
results of the Index are accessible at http://www.firstrepublic.com. The
Index has tracked luxury homes since 1985.
Los Angeles Area Values
Values in the Los Angeles area declined for the third consecutive
quarter and are at the lowest since the first quarter of 2006, when the
average luxury home was $2.29 million.
Agents said the lower end of the luxury market is weakest because
move-up buyers are staying put. "The market is slow until about $4 million,
but the moment you hit that threshold, there is consistent, pent-up
demand," said Barry Sloane of Sotheby's International Realty in Beverly
Hills. "The higher the price, the greater the demand, and the more sales
there are. It's extraordinary."
In Orange County, prices for inland properties have fallen, while homes
in beach communities have retained their value. Throughout the region,
buyers are focused on getting a deal. "Today, it has to be perceived as a
bargain," said Gary Legrand, President of Surterre Properties in Newport
Beach. "We just had three deals with multiple offers because the properties
were considered a good value. When the price is right, buyers are jumping
in. It's a great time to buy, especially if you hold for a couple of years
or longer."
In Montecito, the lower end of the luxury market is the softest. "For
homes priced at $3 million to $4 million and above, there is a fair amount
of activity," said Jeff Farrell of Coldwell Banker Previews International
in Montecito. "Sales are down overall, but in that range, prices are
holding relatively well."
San Diego Area Values
Values in the San Diego area also declined over the past three
quarters. The region's 4.9% decrease in the first quarter of 2008 compared
to a year ago was the largest price drop in the three California markets
measured by the Index. San Diego values are the lowest since the second
quarter of 2005, when an average luxury home was $2.01 million.
In Rancho Santa Fe, the market was tepid in the first quarter, although
it has picked up recently. "There has been a lot of activity in the past
few weeks coming into our peak season," said Brian Guiltinan, President of
Prudential California Realty's Estates Division in Rancho Santa Fe. "In
marquee communities and more seasoned communities, people are looking to
buy something attractive. This is the time you can make a low offer without
offending anyone."
Susan Meyer-Pike of Prudential California Realty in San Diego said the
luxury end of the market has held up, although it is likely to weaken by
the third quarter. She said that declining prices may motivate buyers who
have been waiting. "People are starting to realize what a good opportunity
it is to get into a home they couldn't afford before," said Meyer-Pike. "It
is a great move-up market."
San Francisco Bay Area Values
In the San Francisco Bay Area, values fell for the second straight
quarter. Despite the decrease, the average luxury home in the region has
remained above $3 million for the past four quarters. Agents said San
Francisco, the Peninsula and southern Marin County continued to be robust,
while luxury values in suburban communities have been affected the most.
"I have a hard time reconciling that the market is down in San
Francisco," said Val Steele of Sotheby's International Realty in San
Francisco. "The luxury market is as strong as ever. Our biggest problem is
lack of well-done properties. In the corridor between San Francisco and
Silicon Valley, you're still seeing big numbers because the jobs are there
and the economy is strong."
In Palo Alto, the market remains firm. "We're still seeing multiple
offers and homes going over the asking," said Anne King of Keller Williams
Realty in Palo Alto. "We just had a $2 million sale that went 10% over and
it was only on the market for 11 days. We haven't seen decreases in prices
at all. It is still a seller's market in this area."
In the East Bay communities of Lafayette, Moraga and Orinda, the market
is also holding its own. "People feel like we are coming out of the
downturn," said Tara Rochlin of Village Associates in Orinda. "We've been
protected because our inventory has been low. Properties now coming onto
market that are priced right are selling. There is definitely a group of
buyers in this market."
About The First Republic Prestige Home Index
The First Republic Prestige Home Index(TM) 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, Fiserv CSW Inc. 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
First Republic Bank is a private bank and wealth management company
offering personal banking, business banking, trust, brokerage and wealth
management services. The Bank specializes in delivering personalized
relationship-based service through preferred banking or trust offices in
ten major metropolitan areas: San Francisco, Los Angeles, Santa Barbara,
Newport Beach, San Diego, Las Vegas, Portland, Seattle, Boston and New York
City. First Republic offers wealth management services through First
Republic Wealth Advisors and First Republic Investment Management.
Brokerage services are provided through First Republic Securities Company,
LLC, and trust services are provided through First Republic Trust Company.
More information is available on the Bank's website at
http://www.firstrepublic.com. First Republic is a division of Merrill Lynch
Bank & Trust Co., FSB.
SOURCE First Republic Bank
 back to top
Related links:
http://www.firstrepublic.com/
CONTACT:
Greg Berardi of Blue Marlin Partners,
+1-415-239-7826, greg@bluemarlinpartners.com
|
