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California: Luxury Home Values Rise

If you own a luxury home or homes in Southern California, you’re sitting prettier than ever. In Los Angeles, luxury home values are up 6.5 percent from the first quarter of 2007 compared to a year ago, according to the First Republic Prestige Home Index by First Republic Bank, a leading provider of wealth management and private banking services. San Diego luxury home values rose 3.2 percent in the first quarter of 2007 over the first quarter of 2006. The Index has tracked luxury homes since 1985.
“Values in the upper tier of the luxury market are particularly strong,” said Katherine August-deWilde, Chief Operating Officer of First Republic Bank. “Luxury home values in Los Angeles remain the strongest of our California markets because of strength in the entertainment industry and the diversified economy. The luxury markets in San Diego and San Francisco are also doing very well.”

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. 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.

SAN DIEGO HOME VALUES

In the San Diego area, year over year, prices increased 3.2 percent and have averaged single-digit, year-over-year increases for the past five quarters. The average luxury home in San Diego is now $2.17 million.

“Very special high-end properties will always find a buyer,” said Marti Gellens of Prudential California Realty in La Jolla. “Our real estate market will continue to be strong.”

According to Coldwell Banker Rancho Santa Fe specialists Orva and Doug Harwood, “When you consider that Covenant sales for the first quarter of 2006 were 25 percent greater than the first quarter of 2005 and that the first quarter of 2007 matched the performance of 2006, you have to acknowledge the desirability of an area like Rancho Santa Fe. We see an increase of sales to second-home users and move-up buyers.”

K. Ann Brizolis, a Rancho Santa Fe specialist with Prudential California Realty, had this to report at the end of a Wednesday-afternoon open house, “We had tons of people looking at this brand-new $8.9 million listing. Rancho Santa Fe properties are selling well. We have overcome the huge discrepancy we had between potential buyers and sellers in 2006. Sellers are getting more reasonable about pricing and buyers are realizing that if you want a good property, you need to pay for it.”

Coronado’s Kathy Pounds, of Prudential California Realty, said new and remodeled homes in the Coronado Cays are moving well. Her team recently sold three such homes – $3.6 million, $3.8 million, and $4.2 million. She said the Village real estate market also is very healthy.

ABOVE: Jennifer Janzen & K. Ann Brizolis
Prudential California Realty
(858) 756-6355
$4,599,000 in Santaluz
ABOVE: Maxine & Marti Gellens
Prudential California Realty
(858) 551-6630
$14,900,000 in La Jolla
ABOVE: Doug & Orva Harwood
Coldwell Banker Previews International
(858) 735-4481 Doug
(858) 775-4481 Orva
$9,800,000 in Rancho Santa Fe
ABOVE: The Kathy Pounds Team
Prudential California Realty
(619) 997-3171 Kathy cell
(619) 997-3112 Lisa Storey cell
$3,950,000 in La Jolla
LOS ANGELES HOME VALUES

Los Angeles luxury values rebounded 3.6 percent in the first quarter of 2007 after dipping 0.8 percent in the fourth quarter of 2006. Real estate agents said that a limited supply of marquee properties in exclusive neighborhoods was responsible for the 6.5 percent increase in the first quarter compared to a year ago.

The average luxury home in Los Angeles is now $2.44 million. In the first four months of 2007, 29 homes sold for more than $10 million and a record seven of those sold for more than $20 million, according to Michael St. James, a California-based writer who specializes in real estate and finance.

ABOVE: Joyce Rey
Coldwell Banker Residential Brokerage
(310) 285-7529
$28,000,000 in Beverly Hills
“In our high-end Los Angeles markets you have to look at fundamental principles,” said Michael Hiatt of Prudential California Realty in Brentwood. “There is a limited supply of quality, high-end properties. That is the bottom line.”

Hiatt said there is a high global demand for luxury Los Angeles properties—because these properties are relatively affordable when compared to the world’s great cities and because wealthy business people need to own a home here if they have ties to the entertainment or other major L.A. industries. The L.A. area continues to attract buyers from Asian and European markets because of the strength of their currencies against the dollar, which also helps keep the high-end market strong.

“Today’s high-end property values are not inflated, are still appreciating, and are a good investment because of the demand for our desirable, healthy, outdoor lifestyle,” Hiatt said.

Joyce Rey, Executive Director of Coldwell Banker Previews International, agreed. “The $10 million and up market in the western Los Angeles area has been more active than any other segment of the market,” Rey said. “To this date [June 1st] there have been more $20 million and up properties sold or pending than there were in all of 2006. That’s an amazing statistic. All of us have been on a search for major estate properties for our clients.” She said all of the clients have the same expectations – acreage, prime location, and a beautiful home in move-in condition.

ABOVE: Michael Hiatt
Prudential California Realty
(310) 207-7080
$5,150,000 in Santa Monica
ORANGE COUNTY HOME VALUES

The Prestige Index tracks properties in Newport Beach, Laguna Beach, and other luxury Orange County communities. Like Los Angeles, Orange County’s market for homes above $10 million also is robust, with inventories rising for homes selling for $2 million to $4 million.

When looking at year-to-year statistics, the median price for a Laguna Beach home rose to $1.67 million in 2006, an increase of 11.3 percent over 2005. Similarly, the median for Corona del Mar was $2.7 million in 2006, an increase of 21.3 percent over 2005. Coldwell Banker’s John McMonigle has one of the most expensive homes for sale in the USA. The Corona del Mar estate is listed at $75 million.

According to Lee Ann Canaday, a RE/MAX Realtor who specializes in luxury Orange County real estate, “The premier properties, such as the oceanfront or grand estate properties are in high demand here in Orange County. I have continued to experience multiple-offer situations on these special listings.”

“Our prices were up two percent last month,” said another luxury Orange County specialist, Shauna Covington of Prudential California Realty. “There’s lots of activity and we had three properties go into escrow last week. The market is taking off again as we go into the prime buying/selling season.”

ABOVE: Lee Ann Canaday
Re/Max Real Estate Services
(949) 249-2424
$7,199,000 - $7,999,000 in Laguna Hills
ABOVE: Shauna Covington
Prudential California Realty
(949) 395-8786
$2,995,000 - $3,295,000 in San Juan Capistrano
ABOVE: John McMonigle
Coldwell Banker Previews International
(949) 640-3604
$24,950,000 in Laguna Beach
ABOVE: Lynn, Sheree & Kim Chadwick
Prudential California Realty
(949) 858-0234
$13,900,000 in Coto de Caza
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