“People at this income level,” Paster said before the auction that wasn’t, “always have money.”

That maxim proved true when it came to luxury properties in the Bay Area last year. Technology executives paying discounts on listed prices were active buyers in 2012, as the growth of social-media and Internet firms including Twitter and Yammer created a wave of millionaires.

Some older homes on the market had sat unsold for years before finding buyers, said Rick Turley, president of Coldwell Banker Residential Brokerage of Northern California. But by the final week of 2012, there were at least 13 publicly recorded transactions for more than $10 million in exclusive San Francisco neighborhoods such as Pacific Heights, Presidio Heights and Sea Cliff, according to DataQuick, a research firm.

That’s up from six sales last year and a dozen in 2007, the previous high mark. The numbers don’t include deals in expensive areas outside the city, such as Belvedere, Tiburon, Atherton or Palo Alto.

“Over a long listing period, it’s hard to say what will happen, because obviously the market is constantly changing,” Turley said. “The success of tech and social media means people are looking very generally at San Francisco and the Silicon Valley as places to live because these businesses are sourced here. It’s highest on their radar.”

Initial public offerings in 2012 by Bay Area companies raised a record $17.5 billion in public equities markets, including sales by Facebook, Yelp and Workday, according to data compiled by Bloomberg. The total is more than double the $8.3 billion reached in 1999, the height of the dot-com boom.

This year’s Bay Area IPOs generated $9.4 billion in cash for selling shareholders. Other investors have been able to generate money before initial stock sales through the rise of secondary-share markets such as SharesPost.

Yammer founder

Yammer founder David Sacks, who sold the social-media company to Microsoft in June for $1.2 billion, later bought an unfinished home in Pacific Heights that had been listed for $38.5 million. The transfer tax indicated a $20 million sale.

Sacks’ new residence, built in the style of a French chateau, was last purchased by Peter Sperling, incoming chairman of Apollo Group Inc., who paid $32 million in 2002, said David Barrett of listing brokerage Warwick Properties Group.

“It’s built to be the finest residence in San Francisco, from limestone quarried in France and with the same glaziers who worked on the Eiffel Tower renovation,” Barrett said.

In December, Jay Paul, the San Francisco developer of 6 million square feet of Silicon Valley offices, including Google’s four-building complex in Sunnyvale, completed a purchase in the same neighborhood, said a person with knowledge of the transaction. The house sold for $28.25 million, said Dona Crowder of TRI Coldwell Banker, a co-listing broker on the home. She declined to comment on the buyer.

Seller deals

The deal was at a 48 percent discount from the asking price in 2007, around the time U.S. housing prices peaked. The seller had most recently sought $34 million, Crowder said.

Paul didn’t return a telephone message seeking comment.

In some cases, luxury discounts this past year in San Francisco and the Silicon Valley are a reflection of aged homes built decades ago that needed extensive renovations, Crowder said. Sellers were also motivated by the prospect of higher capital gains taxes in 2013, she said. Her listing on Broadway in Pacific Heights received higher bids in the past, including one earlier in 2012, which were rejected by the seller, she said.

“The generations are turning over in this neighborhood,” Crowder said in a phone interview. “If it were understood back then that record prices were being offered, it would have been wise to sell” in 2007.

Dorsey, Benioff

Jack Dorsey, a Twitter co-founder, paid $9.9 million in February for a “humble” two-bedroom house in Sea Cliff that had been listed for $12.5 million, said Olivia Hsu Decker, owner of Tiburon’s Decker Bullock Sotheby’s International Realty and Dorsey’s agent on the deal. Salesforce.com CEO Marc Benioff bought a nearby house in 2009, Decker said.

The Sea Cliff neighborhood is named for its location high above the Pacific Ocean, just west of the Golden Gate. In May, Dorsey, who is known to take public buses to work, tweeted a quote from the Chilean poet Pablo Neruda, “I need the sea because it teaches me,” Decker said.

Other multimillion-dollar home buyers of 2012 included Mark Pincus, founder of online game maker Zynga. He purchased a Pacific Heights house in July for $16 million after a $500,000 price cut, said Decker, who represented him in the past and also was the listing agent for the Belvedere home.

Rising prices

The region’s broader housing market is also showing strong demand, bolstered by the addition of 32,400 new jobs in the San Francisco metropolitan area in the year through November. House and condominium prices in the nine-county Bay Area in November rose almost 21 percent from a year earlier to a median $438,000, the highest since August 2008, according to DataQuick of San Diego. Sales jumped almost 16 percent.

Dan Levy is a Bloomberg writer. E-mail: dlevy13@bloomberg.net

Article source: http://www.sfgate.com/realestate/article/Luxury-Bay-Area-homes-selling-briskly-4160241.php

Yesterday we reported on how certain builders in Dallas, TX claimed there were not enough skilled workers to fill the construction jobs they have open. The story garnered a huge response, with most claiming that was impossible, but others noting that it is all about the pay scale. (Read the story:Home Builders Don’t Have Enough Workers to Meet New Demand)

“Only about 20 million out of work construction workers in the country. I think what they really mean is they can’t find enough workers who will do hard construction work for 8 dollars an hour,” wrote one respondent on the blog.

I’m a sub-contractor in South Florida,” wrote another. “The problem here is, the big builders are paying sub-contractors less than what they paid in 1998. On top of that there are more city and OSHA rules to abide by. There is no way for me to employ a crew and pay them what they need to support their families. The only crews that are working are illegals, and the only reason they can survive on these wages is because there living with 2 families in 1 bedroom apartments. That’s not my idea of job creation.”

Builders will argue that the rising cost of construction materials is making it harder for them to raise wages, not to mention that they are still competing with large supplies of cheaper, distressed properties, many of which are relatively new construction.

“Here locally, we’ve measured that the average price of a house has gone up 1.7 percent from last year, which is not nearly enough to cover the 9 percent increase in costs that has occurred since 1st of the year, so it’s coming right out of the margin,” says Stephen Brooks, CEO of Dallas-based Grand Homes.

The argument quickly turns to immigration policies, given that so many construction workers are not U.S. citizens, but it is also a matter of investment in the work force, which we see in so many sectors, like the auto industry, as reported by CNBC’s Phil LeBeau today. Apparently their aren’t enough skilled engineers to do the necessary work on cars. (Help Wanted: Engineers)

Says another blogger: “I’m thinking these folks need to rescrew on their heads on what it will take to grow their businesses, like maybe invest some resources to bring new folks on board and work with them to make sure they have those skills they want long term.”

Questions?  Comments?  And follow me on Twitter @Diana_Olick