Rising home prices and an improving economy are driving the state's high-end luxury market with record sales above $2 million dollars. A real estate information service reports last quarter, the number of California homes that sold for a million dollars or more rose to its highest level in seven years. Many of the high-end homes are in Silicon Valley.
According to CoreLogic DataQuick, a total of 12,826 homes sold for a million dollars or more during the second quarter of 2014, up 60.4 percent from 7,994 in the first quarter, and up 9.1 percent from 11,758 in second-quarter 2013. The $1 million-plus sales during the April-through-June period were the highest for any quarter since 13,681 homes sold for $1 million or more in second-quarter 2007.
A number of Silicon Valley neighborhoods were among the California communities with the highest number of $1 million-plus sales last quarter. Hillsborough, with 144 million-dollar plus home sales, came in second to Manhattan Beach (146 sales) on the list of communities with the most $1 million-plus sales last quarter, followed by San Jose (137 sales). Also on the list were Cupertino (120 sales), Menlo Park (109 sales), Saratoga (108 sales), Los Gatos (101 sales), and Los Altos (81 sales). The most expensive home sales in these communities ranged from $3.3 million to $12.9 million. The report states virtually all home sales in Hillsborough, Atherton and Los Altos were in the million-dollar category.
At a recent Silicon Valley Association of REALTORS® meeting, Daphne Chou, a REALTOR® with Alain Pinel Realtors, said many high-end buyers are from China because they see U.S. property as a "good deal." Chou said in China, buyers may be able to purchase a home, but they do not own the land that the home sits on. They also get more for their money in terms of square feet and lot size.
Chou said the Bay Area's proximity to China, cultural diversity, climate, air quality, excellent schools, and owning land they can pass on to their children are reasons why Chinese buyers are attracted to the region. Living in an area where big tech companies like Facebook and Google are located also gives them status and brings the promise of future appreciation.
CoreLogic DataQuick reports of homes that sold for $1 million or more in the second quarter, 3,882 were purchased with cash. The median down payment paid by those who financed their purchase was 30 percent.
The median price paid per square foot for all million-dollar homes last quarter was $729, up 7.6 percent from $678 in second-quarter 2013. For the overall California market, the square-foot median was $226 last quarter, up 13 percent from $200 in second-quarter 2013.
The million-dollar transactions tracked by CoreLogic DataQuick included home sales where it could be determined from public records that there was a buyer, a seller, that money changed hands, and that there was a legal transfer of property ownership. Sales to companies and trusts were included, but property swaps, sales of multiple lots, sales where no price or loan amount was available, teardowns, and large farm or ranch properties were not included.
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.
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