High-end real estate market in Northern California stabilizes after weak first quarter

Posted by Gary Marsh — July 23, 2006

July 18, 2006 -- Saratoga, Calif. – Sales of previously occupied homes priced above $1.5 million and $2.5 million in Northern California stabilized and held steady in the second quarter this year after a more dramatic market adjustment in the first quarter of 2006, according to the Distinctive Homes & Estates second quarter report by Alain Pinel Realtors. The real estate brokerage has 24 Northern California offices and is consistently ranked among the top 10 largest realty firms in the United States. Alain Pinel also reported that the inventory at the high end – or homes offered for sale, increased only modestly in the second quarter for homes priced from $1.5 to $2.499 million while inventory of homes offered above $2.5 million actually decreased for the first time in several quarters. Based on public records researched from the leading multiple listing services in San Francisco, San Mateo, Santa Clara, Santa Cruz, Monterey, Contra Costa and Alameda counties, overall units of homes sold above $2.5 million in the second quarter totaled 216 homes, compared with 246 homes sold in the same period a year ago -- April 1 to June 30. Sales volume declined from $894.28 million for the 246 homes in the second quarter 2005 to $843.3 million this year, a 5.5 percent decrease. At the $1.5 million to $2.499 million level, 955 homes sold in the seven counties in the second quarter this year, an 11.5 percent drop compared with 1,074 homes sold in that price range in the second quarter 2005. Sales volume fell from $2.435 billion to $2.223 billion for a decline of 8.75 percent. The figures demonstrate that the high-end market continues its correction but overall is holding up better than many expected. “The sky isn’t falling at the high-end and in luxury-priced homes,” said Ginny Cain-McMurtrie, vice president of marketing with Alain Pinel Realtors. “The numbers don’t lie – there is a slow down, but one has to consider the comparison – 2005 was a record year for sales and price appreciation at the high-end, and it was also the culmination of a four-year run in which home values increased for the overall market for luxury real estate property holders. Further, the stabilization of inventory at the high end is promising and indicates that the big adjustment for luxury real estate occurred in the first quarter,” she said. Regarding inventory, there were 649 homes for sale above $2.5 million at the end of the quarter, versus 664 at the end of June 2005, for a 2.2 percent decrease in inventory. At $1.5 million to $2.499 million, inventory of homes listed for sale was up a modest 3.8 percent, from 2,257 at the end of the second quarter 2005 to 2,346 homes in that price range by the close of the second quarter this year. The rise or fall of inventory is often considered a leading indicator of sales in subsequent quarters, as measured in units, total volume and median price. The second quarter performance of the high-end and luxury market for residential real estate performed considerable better than the first quarter this year, when sales volume for homes sold above $2.5 million fell 8 percent compared with the first quarter 2005 and inventory spiked 16.5 percent at this level. At $1.5 million and above in the first quarter this year, sales volume fell 11 percent from the first quarter 2005 while inventory last quarter also showed an 11 percent increase over the first quarter 2005. The data is a compilation of information provided to members of the multiple-listing services that serve Realtors in the region (SFMLS, REINFO and MAX-EBRD). For a county-by-county analysis of homes sold and listed for sale at the benchmark rates of $1.5 million and $2.5 million, please read the balance of the report. Distinctive Homes & Estates Market Index Source: Alain Pinel Realtors and Terradatum (www.Terradatum.com) Second Quarter 2006 Sales Performance DH&E marketplace Seven Northern California Counties Santa Clara County In Santa Clara County during the second quarter this year, 51 homes sold for more than $2.5 million compared with a year ago when 69 homes sold in the county at this price level. The median price of homes sold for more than $2.5 million was off by $250,000 -- $2.850 million this year versus $3.1 million a year ago. The highest recorded price for a home sold in the county was $2.85 million, in Los Altos Hills. Inventory of homes for sale above $1.5 million declined slightly. There were 776 homes for sale at the end of the quarter for more than $1.5 million, a 3 percent decrease from a year ago. Santa Clara County DH&E base rate $2.5 million + Period 2Q 2006 Total Sold: $159,740,109 Units Sold: 51 Highest Price: $2,850,000 City: Los Altos Hills Period 2Q 2005 Total Sold: $227,698,690 Units Sold: 69 INVENTORY/Unit Sales Santa Clara County DH&E base rate $1.5 million + Period 2Q 2006 Listed: 776 Listed Median: $1,998,000 Units Sold: 311 Period 2Q 2005 Listed: 799 Listed Median: $1,999,000 Units Sold: 366 San Mateo County A comparable number of homes in San Mateo County sold for more than $2.5 million in the second quarter this year (71 versus 70 in 2Q05) and the median sale price at this level shot up a whopping $450,000 -- from $3.1 million during the second quarter 2005 to $3.55 million by the end of June this year. The median sale price of Santa Mateo County homes sold above $2.5 million showed the greatest increase among the seven counties tracked by Alain Pinel. The highest recorded price of a home sold in the county was $12.95 million, in Atherton. Inventory of homes listed for sale above $1.5 million was similar -- 391 at the close of the first quarter this year compared with 403 a year ago which equals a decrease of 4 percent. San Mateo County DH&E base rate $2.5 million + Period 2Q 2006 Total Sold: $305,681,710 Units Sold: 71 Highest Price: $12,950,000 City: Atherton Period 2Q 2005 Total Sold: $258,804,500 Units Sold: 70 INVENTORY/Unit Sales San Mateo County DH&E base rate $1.5 million + Period 2Q 2006 Listed: 391 Listed Median: $2,198,000 Units Sold: 226 Period 2Q 2005 Listed: 403 Listed Median: $2,175,000 Units Sold: 237 Alameda County The 14 Alameda County homes sold for more than $2.5 million in the second quarter this year did so at median price increase of $437,500, making it the second best performance of the seven counties tracked by Alain Pinel Realtors. In the second quarter a year ago, 11 homes sold at this price point or greater and the median price was $2.88 million, compared with a median price of nearly $3.32 million for the period ended June 30. Inventory of homes offered for sale above $1.5 million, however, increased 7 percent from 216 homes at the end of the second quarter 2005 to 232 homes this year. The highest priced home sold was in Piedmont, for $5.68 million. Alameda County DH&E base rate $2.5 million + Period 2Q 2006 Total Sold: $48,885,000 Units Sold: 14 Highest Price: $5,680,000 City: Piedmont Period 2Q 2005 Total Sold: $33,824,000 Units Sold: 11 INVENTORY/Unit Sales Alameda County DH&E base rate $1.5 million + Period 2Q 2006 Listed: 232 Listed Median: $1,900,000 Units Sold: 94 Period 2Q 2005 Listed: 216 Listed Median: $1,995,000 Units Sold: 84 Contra Costa County Like neighboring Alameda County, more homes sold above $2.5 million Contra Costa County during the second quarter this year – 20 compared with 15 in the second quarter 2005. The 20 homes sold at a median decrease in price of $100,000, however, dropping from $2.85 million during 2Q05 to $2.75 million in the second quarter 2006. The highest recorded sale was in Lafayette, for $4.3 million. Inventory of homes offered for sale in the county above $1.5 million increased 13 percent, moving from 423 to 486 homes offered for sale at this price level. Contra Costa County DH&E base rate $2.5 million + Period 2Q 2006 Total Sold: $59,412,000 Units Sold: 20 Highest Price: $4,300,000 City: Lafayette Period 2Q 2005 Total Sold: $45,861,500 Units Sold: 15 INVENTORY/Unit Sales Contra Costa County DH&E base rate $1.5 million + Period 2Q 2006 Listed: 486 Listed Median: $1,892,500 Units Sold: 134 Period 2Q 2005 Listed: 423 Listed Median: $1,895,000 Units Sold: 145 San Francisco County Fewer San Francisco homes priced above $2.5 million sold in the second quarter of 2006 – 40 versus 54 during the second quarter a year ago, while the median sales price of the 40 homes increased $240,000 from a year ago. The median sale price for the quarter in the high-end was $3.575 million, compared with $3.335 million in the second quarter 2005. The most expensive home in San Francisco sold for $15.95 million during the quarter, according to public records. Inventory of homes offered for sale above $1.5 million, meanwhile, was nearly identical and showed a negligible percentage change of less than one percent. There were 157 homes on the market in San Francisco priced greater than $1.5 million as of June 30 this year, compared with 163 homes at the end of the quarter a year ago. San Francisco County DH&E base rate $2.5 million + Period 2Q 2006 Total Sold: $ 187,945,700 Units Sold: 40 Highest Price: $ 15,950,000 City: San Francisco Period 2Q 2005 Total Sold: $ 226,583,500 Units Sold: 54 INVENTORY/Unit Sales San Francisco County DH&E base rate $1.5 million + Period 2Q 2006 Listed: 157 Listed Median: $1,995,000 Units Sold: 124 Period 2Q 2005 Listed: 163 Listed Median: $2,195,000 Units Sold: 129 Santa Cruz County The median price of homes sold for more than $2.5 million in Santa Cruz County slid considerably in the second quarter this year, from $3.2 million in 2Q05 to $2.875 million for the period from April 1 to June 30 this year. The number of homes sold in the county at this level was similar – seven in 2006 versus eight in 2005. The most expense home sold in the county was in Aptos, for $5.5 million. Inventory of homes offered for sale at $1.5 million or greater increased 16 percent, with 93 homes on the market at this price level at the end of the second quarter this year compared with 78 homes for sale above $1.5 million a year ago. Santa Cruz County DH&E base rate $2.5 million + Period 2Q 2006 Total Sold: $22,985,000 Units Sold: 7 Highest Price: $5,500,000 City: Aptos Period 2Q 2005 Total Sold: $26,220,000 Units Sold: 8 INVENTORY/Unit Sales Santa Cruz County DH&E base rate $1.5 million + Period 2Q06 Listed: 93 Listed Median: $1,988,888 Units Sold: 26 Period 2Q 05 Listed: 78 Listed Median: $2,247,500 Units Sold: 30 Monterey County Fewer luxury-priced homes were sold in Monterey County during the second quarter this year – 13, than in the second quarter 2005 when 19 homes sold for at least $2.5 million. The median sales price at this level slipped a bit, too, from $3.6 million at the end of the second quarter a year ago to $3.5 million for the period from April 1 to June 30 this year. A Carmel Valley home sold for the highest price, according to public records, for $12.625 million. Inventory of homes offered for sale in the second quarter spiked 17 percent from the same quarter a year ago, with 221 homes on the market priced at $1.5 million or greater, compared with 175 homes for sale a the close of the second quarter in 2005. Monterey County DH&E base rate $2.5 million + Period 2Q 2006 Total Sold: $58,665,000 Units Sold: 13 Highest Price: $12,625,000 City: Carmel Valley Period 2Q 2005 Total Sold: $75,301,000 Units Sold: 19 INVENTORY/Unit Sales Monterey County DH&E base rate $1.5 million + Period 2Q 2006 Listed: 211 Listed Median: $2,250,000 Units Sold: 40 Period 2 Q 2005 Listed: 175 Listed Median: $2,325,000 Units Sold: 83 About Alain Pinel Realtors Alain Pinel Realtors is a founding member of Luxury Portfolio, an operating unit of The Leading Real Estate Companies of the World (formerly RELO). During 2005, Alain Pinel Realtors (APR) posted a record of $7.75 billion in total sales volume, compared with it previous record of $7.4 billion in 2004. Last year, APR represented home buyers and sellers in 6,788 total transaction sides. The average sale per transaction side for Alain Pinel sales professionals in 2005 was $1.14 million. APR has a joint venture partnership in the mortgage lending institution, Private Mortgage Advisors, which is an affiliate of Wells Fargo Bank, N.A. For a complete listing of Alain Pinel Realtors offices, services and agents, please visit our website at apr.com or call 408-741-1111. # # #

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