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REALTOR®: Hilltop home views outrank water-front views according to California luxury client survey

Wednesday, May 21, 2014

Even in a state with hundreds of miles of beautiful, sandy beaches, luxury home buyers in California preferred hilltop homes over ocean-front properties by a margin of four to one, according to the California Association of REALTORS®' "2013 Luxury Real Estate Consumer Survey." In the past year, a vast majority of homebuyers who purchased luxury homes bought the home as a primary residence.

The Luxury Real Estate Consumer Survey was conducted by C.A.R. via email to a random sample of REALTORS® statewide who worked with luxury home buyers that closed escrow on their homes within the 12 months prior to November 2013. A luxury home is priced at $1 million and over.

Forty-one percent of buyers who bought luxury homes last year, purchased a home with a hilltop view, compared to 10 percent who bought an ocean-front home. Meanwhile 38 of buyers who bought luxury homes in 2013 bought ocean-front homes and ocean-view homes combined (38 percent). Luxury homes purchased by other buyers were located near a golf course (16 percent), mountain area (12 percent), resort area (9 percent), lake-front (4 percent), and ski resort (1 percent).

Seventy-nine percent of luxury home buyers said they purchased the home as a primary residence, while 10 percent purchased the home as a vacation or second home. Nine percent purchased the home as an investment or rental property.

One-fourth of luxury home buyers said the main reason they purchased a home was because they wanted a larger home. Traditional buyers, on the other hand, said they were tired of renting as the primary reason for purchasing a home.

More than a third of all luxury buyers (35 percent) were able to pay all cash for their property, compared to 27 percent of traditional buyers, and 11 percent of first-time buyers. Luxury home buyers also made higher down payments (30 percent of the sale price) than traditional buyers (25 percent), and as a result had less difficulty in obtaining financing than traditional buyers.

Buyers of luxury properties tend to be more optimistic than traditional buyers. More than seven in 10 (71 percent) of luxury home buyers said they expected home prices to increase in one year, compared to 36 percent of traditional buyers. Luxury home buyers intended to keep the property for a median of 10 years, compared to six years for traditional buyers.

David Tonna, president of the Silicon Valley Association of REALTORS®, mentioned the shortage of inventory and strong demand for homes are bumping up many homes in the valley to the $1 million and over price mark. "Silicon Valley has its own special attributes with accessibility to these same amenities, whether hilltop or ocean, along with the finest educational institutions and cultural diversity," said Tonna.

At a meeting with SILVAR members last week, Mark Messimer, director of Outreach/ Education Services with MLSListings Inc., announced homes are selling in Silicon Valley and prices have skyrocketed. He indicated it is most apparent in Atherton, where prices are up over 40 percent year-over-year. For April, the top three homes in Atherton sold for $15 million, $12.7 million, and $11.9 million. Homes in other neighborhoods are not far behind.

"You can't keep anything on the market," exclaimed Messimer.


The Silicon Valley Association of REALTORS® (SILVAR) is a professional trade organization representing over 4,000 REALTORS® and Affiliate members engaged in the real estate business on the Peninsula and in the South Bay. SILVAR promotes the highest ethical standards of real estate practice, serves as an advocate for homeownership and homeowners, and represents the interests of property owners in Silicon Valley.

The term "REALTOR®" is a registered collective membership mark which identifies a real estate professional who is a member of the National Association of REALTORS® and who subscribes to its strict Code of Ethics.

Variations of this article have appeared in local area newspapers.

For further information, please contact Rose Meily at SILVAR Public Affairs, email , or phone (408) 200-0109.

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