California’s luxury home prices are clear evidence of a changing housing market for deep-pocketed buyers, with double-digit gains in the Sacramento region and slight drops in San Diego and San Jose during the third quarter.
Sacramento-area’s luxury home prices, considered the top 5% of the homes sold, increased 18.5% to an average price of $1.02 million during the third quarter compared to the same period a year ago, according to Redfin. The luxury home price gain was three times more than the 5.8% increase for the remainder of the market.
Sacramento has become a lower-priced option for those in more expensive regions in the state, especially the Bay Area, where the median home price is about $1 million.
San Diego’s luxury home prices declined 4% and San Jose was off 3.2% during the third quarter compared to a year ago. Both markets, regardless of the price range, have experienced stagnant or modestly lower prices in recent months.
Concern over the economy has caused big-priced buyers to pull back nationwide during the past three quarters. But those fears eased in the third quarter, thanks to good job numbers and higher incomes, says Redfin chief economist Daryl Fairweather.
“Because recession fears peaked over the summer, I expected luxury home prices and sales to dip. But it appears that nerves alone weren’t enough to scare off wealthy homebuyers,” says Redfin chief economist Daryl Fairweather. “The U.S. economy grew faster than expected in the third quarter, partly as a result of healthy consumer spending.”
Feature photo of San Jose-area home by Hank Shiffman/Shutterstock
Home sweet, profitable home
Homeowners are staying longer — and selling their homes for more.
In fact, three of the 10 cities with the largest home-seller gains during the third quarter were in California, including an impressive 82% profit in San Jose, easily the largest in the nation, according to ATTOM Data Solutions.
San Francisco home-sellers enjoyed a 72% profit, the second-largest percentage increase in the nation. San Jose and San Francisco home-sellers stayed in their homes, on average, more than 10 years before hitting the road.
Santa Rosa home-sellers had the sixth-largest gains in the nation, at 57.7%.
“The seven-year U.S. housing boom is back in high gear,” says Todd Teta, chief product officer at ATTOM. “There had been signs before the latest surge of a cooling market, but they seem to have diminished, at least for now.”
Photo of Victorian homes in San Francisco by Irina Kosareva/Shutterstock
LA, SF apartments among priciest in U.S.
California is expensive, but at least you’re not living in Manhattan.
The core of the Big Apple had seven of the 10 most expensive ZIP codes in the nation, but Los Angeles and San Francisco also made the list.
Rent was about $6,200 in Manhattan (ZIP 10282), easily the priciest in the U.S., according to RENTCafe.
But the area in Brentwood (ZIP 90024), near the University of California, Los Angeles, was the fourth most expensive in the U.S. and the priciest in the state at $4,944.
Los Angeles (90048) and San Francisco (94105) were the fifth and sixth priciest places for rent. Eighteen of the 50 most expensive ZIP codes were in California.
More than half of the costliest apartments are in Manhattan.
Photo of San Francisco apartments by Berti123/Shutterstock