Luxury home prices posted double-digit gains and rose to all-times highs in Los Angeles, San Diego and San Francisco in the second quarter of 2005 compared to a year ago, according to an index that tracks luxury homes.
Los Angeles values jumped 21.9 percent in the second quarter compared to a year ago; San Diego values increased 16.5 percent in the same period; and San Francisco Bay Area prices jumped 10.4 percent for that period, according to first Republic Bank’s Prestige Home Index.
Los Angeles values jumped 2.6 percent from the first quarter of 2005 to the second quarter of 2005 and rose 21.9 percent from the second quarter a year ago. The average luxury home in Los Angeles is now a record $2.09 million, up $376,000 from a year ago. Values have increased 20 percent or more for four consecutive quarters on a year-over-year basis, the index indicated.
San Diego values increased 2.2 percent from the first quarter of 2005 to the second quarter of 2005, and were up 16.5 percent from the second quarter a year ago. The average luxury home in San Diego topped $2 million for the first time in the second quarter and is now $2.01 million, up $285,000 from a year ago, according to the index.
San Francisco Bay Area values rose 3.9 percent from the first quarter of 2005 to the second quarter of 2005 and gained 10.4 percent from a year ago. San Francisco luxury home values remain the highest in the state at a record $2.8 million, up $263,000 from the second quarter of 2004, the index indicated.
“Luxury home prices in California set records again in the second quarter of 2005 due to double-digits gains,” said Katherine August-deWilde, chief operating officer of First Republic Bank, in a statement.
“Despite these significant increases, we are starting to see some resistance to prices, and buyers are exercising more caution. First Republic believes values will not appreciate as rapidly as they have over the past few years, particularly if interest rates continue to rise,” August-deWilde said.
On a year-over-year basis, luxury homes in Los Angeles continued to appreciate faster than anywhere else in California, the index said. Powered by a robust economy and the strength of the entertainment industry, Los Angeles values have posted double-digit price increases for the past 10 quarters on a year-over-year basis – the longest continuous stretch of appreciation in the history of the Index.
While prices have risen rapidly, real estate agents said sales are slowing, inventory is increasing, and sales are taking longer, according to the index. Agents attributed those trends to the seasonal sales cycle, but also cited rising interest rates and greater caution among buyers as prices reach new heights.
First Republic Bank is a provider of full-service banking, investment management, brokerage and trust services. The company produces the Prestige Home Index each quarter with Fiserv CSW Inc., a provider of automated property valuation services and home-price metrics to U.S. financial institutions.
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