Paragon once again hit the San Francisco Chronicle yesterday, this time with its research on the city’s luxury home market. In a phrase: happy days are here again. According to Paragon’s July 2014 luxury home update, home sales and prices in this segment are flying past their previous peaks.
In 2008, those peaks were seen as the last gasp of the boom market; most other housing segments began to lose steam in 2006 and 2007. Following the crash of September 2008, the city’s high-end home market saw the least value drops on a percentage basis: 15 to 20 percent as compared to the 20 to 60 percent drops seen in other segments and regions. It then led the recovery beginning in late 2011.
Today, luxury home values in San Francisco are kicking the butt of what they once were. Why is this? Well, there are several factors:
· The continuing growth of the Bay Area economy
· The huge local surge in high tech and affiliated wealth
· An increase in well-heeled foreign buyers
· The fact that the most affluent folks around here have profited most from the recent appreciation in stocks and other financial assets.
In a nutshell: there’s a lot of money – both new and old – in San Francisco looking for real estate to snap up. So let’s define what luxury is in order to see what these people are looking to buy: condos, co-ops and TICs selling for $1.5 million and above and houses selling for $2 million or more.
According to our research, a total of 291 properties in this category sold in the second quarter. That’s more than twice the number – 142 – sold in the second quarter of 2007, which was the luxury market’s previous peak. Let’s compare that to sales of all homes and condos, which dropped slightly during the same period (1,498 sales in the second quarter from 1,593 in the second quarter of 2007). We use the second quarter for comparisons because it is typically the year’s busiest.
Last year, there were 741 luxury sales. That was up a whopping 75 percent from 425 in all of 2007. During that period, sales of all homes and condos in the city rose only 9.8 percent.
If you have a luxury property that you’re seeking to sell, we need to talk. Get in touch.
Dreaming of San Francisco? Cece Blase offers local advice to San Francisco buyers, sellers and owners– and feeds the dreams of those who wish they could live in Tony Bennett’s ‘City by the Bay.’ Call 415-577-0809 or email firstname.lastname@example.org. www.ceceblase.com