SAN FRANCISCO, Feb. 25, 2008
/PRNewswire/ -- Luxury home prices declined modestly in Los
Angeles and San Francisco in the fourth quarter but rose
year-over-year, while San Diego values posted small decreases
in the fourth quarter compared to a year ago, 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 Dec. 31, 2007, the Index indicated the
following:
-- Los Angeles area values declined 1.2% from the third
quarter of 2007 and rose 2.0% from the fourth quarter of 2006.
The average luxury home in Los Angeles is now $2.4 million.
-- San Diego area values fell
1.4% from the third quarter of 2007 and dropped 1.9% from the
fourth quarter of 2006. The average luxury home
in San Diego is $2.11 million.
-- San Francisco Bay Area values
decreased 1.7% from the third quarter of 2007 and were up 3.7%
from the fourth quarter of 2006. The average
luxury home in San Francisco is $3.03 million.
"Luxury home prices in California weakened in the fourth
quarter, but they are holding their own on a year-over-year
basis," said Katherine August-deWilde, President and Chief
Operating Officer of First Republic Bank. "At the high end of
the luxury market, demand remains quite strong, while buyers
at the lower end are being more selective. Overall, prices in
Los Angeles, San Francisco and San Diego have remained firm
due to a lack of inventory and the desirability of luxury
neighborhoods."
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 are down from a high of $2.46
million in the second quarter of 2007. The 1.2% decline in the
fourth quarter of 2007 was the region's second consecutive
quarterly drop. In December 2006, the average value of a
luxury home in the Los Angeles area was $2.35 million.
On the West Side, the higher end of the luxury market remained
strong. In 2007, the number of home sales over $5 million
totaled 261, up from 211 in 2006, according to Joyce Flaherty
of Coldwell Banker in the Beverly Hills South office. Sales in
2008 are already running ahead of last year's pace. "People
who have a tremendous amount of money don't care about the
market, and they're buying," Flaherty said. "As long as it is
fairly priced, properties are selling. A $22 million property
recently sold within a week."
Anita Rich of Keller Williams in Sherman Oaks said that the
lower end of the luxury market is holding up much better than
it was two months ago. "People have realized that the bottom
isn't going to fall out," Rich said. "More people are now
focused on buying. I'm seeing more stability in the market,
and I see attitudes improving among buyers and sellers."
In Orange County, the market is also active, although
inventory levels are modestly higher. "We continue to see
strength in the high end of the market," said Cari Young of
HOM Real Estate Group in Newport Beach. "We've seen some of
the largest sales ever, both this year and at the end of last
year. We just haven't seen a significant drop in prices in the
coastal areas and more desirable communities."
San Diego Area Values
Values in the San Diego area are down from a high of $2.19
million in the second quarter of 2007. The 1.4% drop in the
fourth quarter was the region's second consecutive quarterly
decline. In December 2006, the average luxury home was $2.15
million.
Despite the declines, some agents said the market has not
fallen substantially. "We're not seeing wholesale price
reductions," said Lucy Kelts, Prudential California Realty in
Rancho Santa Fe. "If something is listed fairly, there is room
to negotiate and make good deals. Inventory is also shrinking
and builders are not breaking ground on any new projects. When
the inventory levels out, buyers who have been waiting may not
find a lot to choose from."
In northern San Diego County, the market has slowed somewhat,
but interest in beach properties remains high. "There are a
lot of buyers with the means of buying second homes, and they
want real estate close to the ocean," said Wendy Ramp of
Prudential California Realty in Del Mar. "Homeowners can walk
to everything they want in Del Mar -- restaurants, beach and
shopping. That's why it remains so attractive."
San Francisco Bay Area Values
In the San Francisco Bay Area, values decreased 1.7%, the
first quarterly decline since the fourth quarter of 2006, when
average luxury values were $2.92 million. The region's luxury
values surpassed the $3 million mark for the first time in the
second quarter of 2007. However, inventories are low for
high-end properties in the City and parts of Marin and the
Peninsula, where values remain strong.
Agents said demand for luxury homes remains high in San
Francisco, even though values have softened in areas outside
of the City. "The market is just very strong," said Richard
Weil of Hill & Co. in San Francisco. "We don't have any
inventory. It comes down to that." Weil said homes between $3
million and $5 million are taking a little longer to sell, but
demands for properties above $6 million have been largely
unaffected by the downturn affecting the rest of the housing
market.
On the Peninsula, the luxury market remains strong in some
high-end communities. "In the past few weeks, we've had some
phenomenal sales in Atherton and some very large sales in
Woodside," said Sue Crawford of Coldwell Banker in Menlo Park.
"People with money aren't as impacted by what's happening with
interest rates."
In Marin County, the upper tier is stronger than the lower end
of the luxury market. "The volume of sales has slowed somewhat
in the past three months," said Tracy McLaughlin of Morgan
Lane Real Estate in Ross. "Wall Street's undulations have made
the luxury market a little more tenuous."
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
CONTACT: Greg Berardi of Blue
Marlin Partners, +1-415-239-7826,
greg@bluemarlinpartners.com, for First Republic Bank
Web site:
http://www.firstrepublic.com/ |
