California Multimillion-Dollar Home Sales Soar to a Record

Thursday, 30 Jan 2014 04:19 PM

 

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The number of California homes sold for $2 million or more climbed to a record last year as housing values in the most populous U.S. state rebounded from the foreclosure crisis, DataQuick said today.

Almost 4,500 properties sold for $2 million to $3 million, up 37 percent from the previous peak set a year earlier, the San Diego-based research firm said in a statement. Home sales in the next million-dollar increment, to $4 million, rose 31 percent, and those to $5 million gained 29 percent.

The technology boom in San Francisco and the Silicon Valley is pushing home prices higher, said Alan Mark, president of property-research firm Mark Co. The 25 California cities with the most $1 million-plus sales last year were split almost evenly between coastal cities including Manhattan Beach and La Jolla in the south and Silicon Valley towns such as Hillsborough, Menlo Park and Los Gatos, according to DataQuick.

The luxury-home market “responds to its own set of economic factors,” with initial public offerings, stock-market performance and other investment decisions playing a greater role than “traditional factors” such as job growth and interest rates, DataQuick President John Walsh said in today’s statement.

Last year’s most expensive confirmed sale in California was a Malibu beachfront mansion in Los Angeles County, built in 1993 with 15,355 square feet, eight bedrooms and 14 bathrooms that sold for $74.5 million. The largest property sold had 25,447 square feet and was purchased for $2.25 million in Indian Wells, near Palm Springs in Riverside County.

Cash Purchases

Almost all homes sold in Santa Monica and Rancho Santa Fe in southern California, and in Atherton and Los Altos to the north, went for prices higher than $1 million, DataQuick said. More than 10,600 homes that sold above that level were bought with cash, a record surpassing the 7,791 such deals in 2012. The median down payment for purchases using mortgages was 30 percent of the price, the research firm said.

Sales of homes for at least $1 million rose 45 percent from 2012 to a six-year high, DataQuick said. That increase compares with a 0.6 percent decline for all California residential transactions.

Million-dollar transactions were determined from public records in which buyers, sellers and legal transfer of ownership were recorded, including sales to companies and trusts, DataQuick said. Excluded from the report were real estate swaps, sales of multiple lots and large farm and ranch properties, and transactions with no price recorded.

California, once the perennial leader in total foreclosure filings and the birthplace of subprime mortgages that triggered a wave of defaults, had a 60 percent decline in repossessions last year from 2012, according to RealtyTrac. One in 100 properties in the state received at least one notice in 2013, the 16th highest foreclosure rate in the U.S., the data firm said on Jan. 16.

© Copyright 2014 Bloomberg News. All rights reserved.

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