High-end home prices plummet in Long Beach, San Francisco
By Ron Trujillo / firstname.lastname@example.org
Two of the seven biggest-losing luxury markets were in California during the first quarter, as a lack of homes hurt the upper end.
Long Beach had the largest decline of luxury markets in the nation, plummeting 26.1% to $1.43 million compared to a year ago,, according to Redfin. The luxury market is defined as the top 5% of sales. The remaining 95% of home sales in Long Beach increased 10.3% to $546,000.
San Francisco’s high-end home prices dipped 3.3% to $4.92 million during the first three months of the year compared to the same period in 2017. San Francisco’s other 95% of home sales increased 10.2% to $1.383 million.
Nationwide, luxury home prices increased 7.9% to $1.8 million for the first quarter compared to a year ago. Long Beach and San Francisco are anomalies compared to the nationwide gains for luxury homes.
Vero Beach, Fla., had the largest annual gain for luxury homes at 68% to $2.654 million, while Reno — considered an across-the-border haven for Californians looking to escape income tax — had the second-largest increase at 51.3% to $1.45 million.
Some higher-end homebuyers may be looking elsewhere with the recent changes to the federal tax law.
“For the first time since changes to the tax code went into effect, luxury buyers could no longer deduct more than $10,000 in state and local property taxes or interest for mortgages over $750,000,” says Nela Richardson, Redfin chief economist. “In a world of balanced supply and demand, these changes would have dampened price growth. Instead, this quarter saw the strongest luxury price appreciation in four years, demonstrating that the current inventory crunch is extremely broad-based and affects buyers at every price range.”
But not necessarily every city is enjoying a hefty increase in luxury home prices.
Photo of Long Beach marina by A.G. Baxter/Shutterstock
Foreclosures on the rise, really
Foreclosures are so 2008. But a decade later, even with fast-rising home prices and impressive equity gains, foreclosures are still an issue, according to ATTOM Data Solutions.
In fact, four California cities are among the 12 metro regions of 1 million-plus residents with a boost in foreclosures in April compared to a year ago:
No. 12: San Francisco, 301 foreclosures started, a 17% increase.
No. 9: Riverside, 829 foreclosures started, a 24% increase.
No. 8: San Jose, 97 foreclosure starts, a 31% increase.
No. 5: Sacramento, 291 foreclosure starts, a 76% increase
Foreclosure photo by Jeff Turner/Flickr.