SAN FRANCISCO-Luxury home values increased in San Francisco, Los Angeles and San Diego in the fourth quarter of 2013 compared to a year ago, according to the First Republic Prestige Home Index by First Republic Bank.
Katherine August-deWilde, president and COO of First Republic Bank, says that "Market conditions in California's luxury communities continue to be very strong. Limited inventory, robust demand and low interest rates are driving prices higher."
In San Francisco, the market was very active. "Prices continue to rise because there is so little inventory and so much demand," says Mary Lou Castellanos of Sotheby's International in San Francisco. "There are a lot of people who want to buy. The homes that do come to market generate multiple offers and offers over the asking."
The market in Silicon Valley was even stronger. "From Palo Alto to Atherton, we are seeing offers 20% to 40% over the asking price," says Pat Kalish of Alain Pinel Real Estate in Palo Alto. "It's tech money as well as foreign buyers. From all indications, prices will keep increasing because the inventory is so low. If you're a homeowner, this is one of the best times ever to sell."
In Marin County, the market improved in the fourth quarter. "Going into the end of the year, homes $4 million and above finally picked up," says Pat Montag of Sotheby's International Realty in Mill Valley. "Prices are getting close to the peak of the market in 2007. We have very little inventory and that's constraining the market."
In the fourth quarter of 2013, the Index indicated the following:
* San Francisco Bay Area values climbed 12.4% from the fourth quarter of 2012 and 1.8% from the third quarter of 2013. The average luxury home in San Francisco is $3.1 million.
* Los Angeles area values rose 13.7% from the fourth quarter a year ago and 1.3% from the third quarter of 2013. The average luxury home in Los Angeles is $2.3 million.
* San Diego area values gained 16.6% year-over-year and 1.3% from the third quarter of 2013. *The average luxury home in San Diego is almost $1.9 million.
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