Move over Beverly Hills 90210. The hot new rising star in the luxury universe is Atherton 94027.
While Beverly Hills may still hold the top spot for ultra luxury home sales (those in excess of $10 million), Atherton cracked the top 10 list in this year’s national Luxury Market Report by Coldwell Banker Previews International, ® our luxury real estate marketing program.
With a total of seven sales, Atherton, and the zip code 94027, tied with Malibu for the seventh spot nationally on the list of zip codes with the most homes sold for $10 million or more. Atherton also ranked ninth for the most listings priced above $10 million with 25, just behind Miami Beach and Laguna Beach.
Atherton has always appealed to venture capitalists, C-level executives and other high-end buyers, with its beautifully groomed estates, large native oaks, excellent quality of life and close proximity to the Peninsula and Silicon Valley. But Atherton’s placement on this prestigious national ranking also speaks volumes about the fast-rising Bay Area luxury market.
A number of our local luxury reports, released over the past two weeks, underscore that the Bay Area’s high-end markets are red-hot these days.
Take San Francisco, for example: Home sales over $2 million soared 51 percent in the first quarter of this year compared to the same period a year ago. A total of 83 luxury properties sold from January-March with a median sale price of $2.76 million.
The upper end of San Francisco’s luxury market was particularly strong in the first quarter with 34 sales of homes over $3 million, nearly double the number in the first quarter of 2012. And there were 17 sales in excess of $4 million compared to just seven a year ago.
In Silicon Valley, there were 123 luxury home sales over $1.5 million in March, up 43 percent from February and 12 percent from a year ago. There were 57 sales over $2 million, up from 41 the previous month and 14 sales over $3 million versus nine the previous month.
Marin County and the East Bay’s luxury market kept pace. Marin saw sales over $1 million jumping 60 percent from a year ago and sales over $2 million doubling from last year. Similarly, with 162 sales in excess of $1 million, the East Bay saw high-end transactions soar 46 percent from March 2012.
In most markets there continues to be a significant shortage of listings to meet very robust buyer demand. We’ve gradually seen inventory come on the market over the past month, but it’s not nearly enough to bring this sellers’ market back into balance.
To illustrate just how critically tight things are on the Peninsula, consider the ratio of active vs. pending listings put together by our Burlingame manager:
· San Bruno – 18 active vs. 36 pending
· Millbrae – 7 active vs. 18 pending
· Burlingame – 24 active vs. 32 pending
· San Mateo – 42 active vs. 83 pending
· Belmont – 17 active vs. 40 pending
· Foster City – 7 active vs. 20 pending
· Redwood Shores – 5 active vs. 9 pending
· San Carlos – 21 active vs. 32 pending
Here’s hoping for a LOT more inventory as we get further into the spring home-buying season. Below is a market-by-market report from our local offices:
North Bay – More properties are being listed but they are selling rapidly, according to our Sebastopol manager. Overall, the available inventory in Sonoma County is down week over week. Almost all new listings, at least those that are properly priced, catch multiple offers within days of being listed. Almost 50% of our buyer-controlled sales are cash. In many cases the buyers intend to refinance immediately after the close of escrow but use cash as an enticement to get their offer accepted.
San Francisco – Our Lombard office manager says a number of agents are stating that the market is slowing a little, and some flawed properties are staying on the market longer. But open houses are still very active and most deals go for over asking price with multiple offers, but in the 4-8 range, not 25 – 35 like last week. Lack of inventory and multiple offers continue to be the headline for local market, according to our Market Street office manager. Of the homes that went into contract this period, all but one received multiple offers (anywhere from two to 22). The one property to be scooped up with a single offer was a “pocket listing.” And though cash is king, buyers that need financing can still win the day if they’re willing to pay significantly more than everybody else. Our Sunset manager says the local market appears to be slowing down just a bit but it is still very active. Prices continued to push upward. The amount of cash offers has decreased slightly. A recent listing at $1 million received 18 offers with only two of them all cash, but the highest offers were well over 30% above asking.
SF Peninsula — Peninsula inventory continues to see brisk turnover with an average selling cycle of about 10 days for a home correctly priced. . Hillsborough currently has 61 active and 20 pending sales. There is a slight increase in inventory while buyers are really getting out to see every new listing. Our Menlo Park manager says the local market is not quite as frenetic as it was 2 weeks ago. Agents are still seeing multiple offers but not as many. There certainly is some buyer fatigue and the rapid price rises are somewhat scary to some. The fact remains that there are still simply too many buyers for the housing stock and there is no relief in sight for any dramatic increase in that housing stock. The Redwood City-San Carlos area remains a sellers’ market with many buyers in all price ranges. It’s still difficult to convince sellers that they can indeed sell and “move up.” Palo Alto remains a very intense market, relative to surrounding areas. Agents are seeing a few luxury properties ($5M+) sell on and off market. The San Mateo area inventory is beginning to grow slightly and even though agents are still getting multiple offers, the count on each property is dropping. Instead of 5 to 15 per listing, there are 2 To 6 on most properties. Woodside and Portola Valley have slowed from the beginning of the year. Agents continue to list some large properties and have had one sell at $12 million, but generally most are sitting. The under $4 million market is moving with the smaller and less expensive properties moving in both ‘county’ towns.
East Bay – Sales activity is steady in the Berkeley area and there still are large groups showing up for the first open house and 10-20 groups on repeat opens. Our Danville manager says she has more listings coming on, but they sell so fast that the overall listing inventory has been shrinking nonetheless. Our Oakland-Piedmont manager reports that market is still hot with over 100 potential buyers going through our open houses. More inventory is coming on the market but not in any large quantity. So the ratio of buyers to listings is still high. The offers agents have ratified in the last two weeks have received offers primarily in the range of 3 – 7 with a high of 19. There’s still a lot of non-contingent offers out there in order to get the property and it doesn’t appear to be easing up. Sellers are definitely in the driver’s seat in today’s Lamorinda real estate market. Unfortunately for buyers, they have to play a guessing game as to how much over the list price they will have to go to get their dream house. This is obviously a very frustrating and mettle-testing time for potential buyers. Agents continue to write offers and help their buyers stay optimistic and competitive. After a burst of new listings hitting the market, our Walnut Creek office said agents are now experiencing a bit of lull with the promise of more listings coming soon. There are a number of “pocket listings” (not an advisable practice) being sold without even reaching the market. Almost every listing is receiving multiple offers, driving prices up. In many of these transactions buyers are waiving contingencies in order to beat out their competition. The number of units sold is slowing down due to lack of inventory.
Silicon Valley – The market continues to be incredibly strong, according to our Cupertino manager. Most open houses are better served by having two hosts. In the Los Gatos area, multiple offers and overbidding are the norm up to the $3 million range. Buyer demand is extremely high for homes in the downtown area. In the Almaden area of San Jose, it’s more of the same with many multiple offers. Our office had one listing with 25 offers. Our San Jose Main office manager says inventory is rising slightly in Santa Clara County. Sales are still brisk in all price ranges and multiple offers are happening on most listings. Open house traffic has been excellent with as many as 50-60 groups through on most properties. Interest rates, appreciation on local properties and the valley’s economy are fueling the market here in Santa Clara County. The Willow Glen market in a word “consistent.” Agents are consistently experiencing multiple offers on all properties our listing inventory continues to come to market then get gobbled up the following week. They are also experiencing consistent price appreciation. The good news is that past comps are now coming to “sold” status so appraisers have some sort of relative current market data to appraise properties at the fast rising appreciated values.
South County – The South Santa Clara County market is still experiencing a severe inventory shortage – down to about one month worth of inventory. Homes in the entry price point are selling in a matter of days with double digit multiple offers. Many buyers readjusting their expectations as what they could previously afford has drastically changed. In Morgan Hill agents are seeing more movement in the million-dollar+ price point with the number of pendings doubling from last month. San Benito County is experiencing the same shortage of inventory, multiple offer situations, and over-bidding. There are no REO properties active for sale in San Benito County. There are no REO properties for sale in Morgan Hill. And in all 3 markets there are less than 10 short sales actively for sale. This is quite a dramatic change from one year ago. The good news is that agents are seeing more Morgan Hill homes coming on the market. As of May 9 there were 70 single family homes offered for sale in Morgan Hill, up from only about 50 homes just a month earlier. The supply has risen from just under two months to a new high of over 3.5 months. Though listings are still scarce potential buyers now have the rare luxury of having several homes to select from, rather than being put into a multiple offer situation. Cash offers are still are common and hardly anyone is purchasing a home with an appraisal contingency as part of their purchase contract.
Santa Cruz County – Fast paced and unpredictable – that’s the status of the Santa Cruz area market. Sale prices on homes that did not sell last year are way up one year. One listing of our local office at $585K last year went off the market with disappointed sellers. Last weekend it sold for $660K with multiple offers and a higher back-up cash buyer in first position. Most of the agents are sorting through their buyers to find and work with the ones that are ready to go now. And their focus has been on a listing push for the agents as evidenced by our office’s year over year increase in listings.
Monterey Peninsula – The steady pace of much activity continues on the Monterey Peninsula. Not only are agents seeing many sales each week, but also the number of listings coming in has increased in last few weeks. It appears that some formerly reluctant sellers have seen the change from a buyers’ market to a sellers’ market and have decided now is the time to sell.