(CNS) Posted Tuesday March 2, 2011 – 2:30pm
Luxury home values edged up slightly in Los Angeles, San Diego and San Francisco in the fourth quarter of 2010 compared to the previous quarter, according to an index released today by First Republic Bank.In Beverly Hills, there are a growing number of buyers, but a limited number of luxury homes for sale, according to Billy Rose of Prudential California Realty in Beverly Hills.
"There is a huge amount of pent-up demand and a very tight market," Rose said. "Financially savvy buyers are really looking to buy, but they are constrained by a lack of inventory. Buyers are likely to look back in early 2010 as the bottom, and we're likely to start seeing appreciation, barring any unusual events."
In the quarter ended Dec. 31, according to the First Republic Prestige Home Index:
-- Los Angeles area values rose 0.6 percent from the third quarter of 2010 and declined 2.2 percent from a year ago. The average luxury home in Los Angeles is now $1.97 million.
-- San Diego area values gained 0.8 percent from the third quarter of 2010 and increased 0.6 percent year-over-year. The average luxury home in San Diego is now $1.71 million; and
-- San Francisco Bay Area values climbed 1.5 percent from the third quarter and were up 3.6 percent from a year ago. The average luxury home in San Francisco is now $2.6 million.
``The fourth quarter of 2010 marked the first time since the second quarter of 2007 that luxury values rose in all three of California's major metropolitan centers,' said Katherine August-deWilde, president and chief operating officer of First Republic Bank.
``The modest increase in the fourth quarter of 2010 was due to low interest rates, a rising stock market and improving consumer confidence,' she said.
In the greater Los Angeles region, luxury home prices rose for the first time since the second quarter of 2008.
In luxury beach communities, "December ended on a high note, and right now the market in Malibu and Pacific Palisades looks strong," said Carolyn Johnson of Prudential California Realty in Pacific Palisades.
"Sellers are pricing their houses reasonably," she said. "Cash buyers are snapping up really good properties at really good prices."
Values in San Diego rose for the first time since the fourth quarter of 2009, according to the index.
Ann Brizolis of Prudential California Realty in Rancho Santa Fe said the luxury market is becoming more active.
"We had a very robust first quarter thus far. The number of sales has increased, and prices are stable," she said. "Since January 1, we have had three closings of $4 million to $6 million. Buyers are realizing that the biggest drop has already happened and there is also good inventory."
But Chuck Gifford of Prudential California Realty in Rancho Santa Fe said he expects values to continue to soften in luxury communities across the region, even though the market for all-cash transactions is heating up.
"The pedal is to the metal in San Diego for all-cash buyers," he said. "There are buys you just can't resist."
Values in the San Francisco Bay Area posted their third increase in the past four consecutive quarters, although the gains were very modest.
The First Republic Prestige Home Index measures changes in homes valued at more than $1 million in key California urban markets.
Luxury homes in the index are usually 3,000 to 6,000 square feet in size, with three to six bedrooms and three to six bathrooms.
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