Luxury Values Remain Stable in San Francisco; Los Angeles and San Diego Values Continue to Fall
August 25 2008 - 5:45AM
PR Newswire (US)
San Diego Values Down 7.8% Compared To Year Ago SAN FRANCISCO, Aug.
25 /PRNewswire/ -- Luxury home prices remained flat in San
Francisco in the second quarter of 2008 compared to a year ago, but
Los Angeles and San Diego continued to decline, 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 June 30, 2008, the
Index indicated the following: -- Los Angeles area values increased
1% from the first quarter of 2008, but fell 3.8% from the second
quarter of 2007. The average luxury home in Los Angeles is now
$2.37 million. -- San Diego area values dropped 2% from the first
quarter of 2008 and 7.8% from the second quarter of 2007. The
average luxury home in San Diego is now $2.02 million. -- San
Francisco Bay Area values rose 0.1% from the first quarter of 2008,
and were up 0.2% from the second quarter of 2007. The average
luxury home in San Francisco is now at an all-time high of $3.01
million. "Values of luxury homes throughout California remain under
pressure due to increased caution among buyers, although attractive
properties in urban markets, desirable suburbs and coastal
communities are selling well," said Katherine August-deWilde,
President and Chief Operating Officer of First Republic Bank.
"First Republic continues to make jumbo home loans to well-
qualified borrowers." 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 fell for the second quarter in a row on a
year-over-year basis. Average luxury values are down from a high of
$2.46 million set in the second quarter of 2007. Mary Beth Woods of
Coldwell Banker in Brentwood said the best properties continue to
sell well, but properties with any perceived issues are generating
minimal interest among buyers. "If the property is not 100%
perfect, the buyers are just walking away. For a home to sell at
the asking price, it needs to be a premium property in a premium
location and in premium condition." Agents said there was
uncertainty about where the market is headed. "We have a lack of
credit availability," said Bennett Carr of Sotheby's International
Realty. "I don't think the market is going to improve until the
credit situation improves." Carr noted that the market above $10
million was the strongest, while homes valued between $2.5 million
and $5 million had been the most impacted. San Diego Area Values
Values in the San Diego area have fallen for four straight
quarters, both on a quarterly and year-over-year basis. Average
values of luxury homes in the region are down from a high of $2.19
million in the second quarter of 2007. Amy Green of Prudential
California Realty in San Diego said values may weaken further
because of growing inventory and limited availability of mortgage
credit. "Super jumbo loans can be difficult to come by." In Rancho
Santa Fe, prices are being reduced and inventory is rising. "It is
a buyers' market, and there is a lot to choose from. Sellers are
more willing to negotiate to make a deal. I have seen a little more
optimism recently, and it feels like we could be turning the corner
ever so slightly." San Francisco Bay Area Values In the San
Francisco Bay Area, values rose to an all-time high of $3.011
million, up from $3.007 million. Unlike other regions of
California, values in the San Francisco Bay Area have recorded only
a small decline since 2003. In San Francisco, agents said the
market remains strong for good properties in good locations, with
multiple offers and offers over the asking. "Transaction counts are
down, but prices are up in the luxury market," said David Papale of
Alain Pinel Realtors in San Francisco. "Homes in the $3 million
range are selling briskly. If the home is priced properly, it is
moving very quickly." Chris O'Connor of McGuire Real Estate in San
Francisco agreed and said the scarcity of family homes in San
Francisco was keeping prices firm. "Given the lack of inventory in
San Francisco, it's going to be an active market in the second half
of 2008. However, there is more balance in the negotiations between
buyers and sellers on both price and terms." In Palo Alto, a lack
of inventory is also driving the market. "We are seeing some
multiple offers when the property is listed at a realistic price,"
said Beverly Brockway, an agent in Palo Alto. "There are buyers,
but finding good inventory is an issue. Sales volume is down
because there is nothing for sale in reasonable condition at the
upper end of the 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. DATASOURCE: First Republic
Bank CONTACT: Greg Berardi of Blue Marlin Partners,
+1-415-239-7826, Web site: http://www.firstrepublic.com/
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