San Francisco’s luxury homes are attracting eager buyers.
Senior Reporter- San Francisco Business Times
Don’t be surprised if you hear your real estate agent and mortgage lender suddenly belt out a rendition of “Happy Days are Here Again.”
Luxury home values in the Bay Area and other key California cities are chalking up their biggest gains since the housing boom went bust in the last decade.
Bay Area luxury home values soared 6.6 percent in the second quarter, the biggest year-over-year gain since the first quarter of 2006.
And Bay Area luxury home values rose 2.9 percent from the first quarter of 2012. The average luxury home in San Francisco is now $2.67 million, according to the First Republic Prestige Home Index produced by First Republic Bank and Fiserv CSW Inc. (NASDAQ: FISV)
“We have a hot market right now,” said Jay Costello, president of Hill Co. in San Francisco. “We’re going to see price increases over the next three to five years.”
Or at least until the Nasdaq makes a U-turn.
Real estate agents point to the strength of the stock market in driving Bay Area home prices since so many of the region’s affluent residents own stocks and options tied to publicly traded companies or private companies that will one day go public or be acquired, or so they hope.
The Nasdaq was approaching an 11-year high this week, thanks largely to shares of Apple (NASDAQ: AAPL) hitting a record high Monday on news of its patent-litigation victory against Samsung.
On the luxury home front, First Republic had more good news. California’s strengthening economy, which first emerged in the Bay Area, is now evident in luxury home values in Los Angeles and San Diego.
Los Angeles values increased 2.4 percent from a year ago and jumped 4.3 percent from this year’s first quarter, marking the biggest quarterly gain since the third quarter of 2005, when the national housing boom was in full swing. The average luxury home value in the L.A. area is now $2.04 million.
Mark Calvey covers banking and finance for the San Francisco Business Times.
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