Wednesday, February 21, 2007

Bay Area Luxury Housing Hot

In the $1 million-plus market: `plenty of buyers,' not enough houses

Bay Area luxury-home prices were up 1.5 percent in the fourth quarter of 2006 compared with a year earlier. However, they dropped 1.5 percent from the previous three months, according to a report released today by First Republic Bank.

According to the banks' Prestige Home Index, the average price of a luxury home was $2.92 million -- or, to put it simply, a lot more than most of us can afford. The banks' survey considers home prices in the Bay Area's ritzier communities, specifically: Alamo, Atherton, Belvedere, Danville, Healdsburg, Hillsborough, Lafayette, Los Altos, Los Gatos, Mill Valley, Moraga, Orinda, Palo Alto, Piedmont, Portola Valley, Ross, St. Helena, San Francisco, Saratoga, Sonoma, Tiburon and Woodside.

Luxury homes are defined as those with at least 3,000 square feet, three to six bedrooms, and three to six bathrooms. And if it's worth less than $1 million, it doesn't make the cut.

Just how is the market doing in that rarefied space? ``For anything under $5 million, buyers are chomping at the bit because there is so little inventory,'' Lea Ann Fleming of McGuire Real Estate in San Francisco said in a statement provided by the bank. ``There are plenty of buyers, but there just aren't enough houses.''
The bank's survey found similar trends in the Los Angeles and San Diego areas, with prices down in the fourth quarter from the previous three months, but up from a year ago.

For more real estate news, check out our
Square Feet blog.

By Frank Michael Russell
Mercury News

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