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Luxury Home Values Increase in the Second Quarter

  Luxury Home Values Increase in the Second Quarter

San Francisco, Los Angeles and San Diego All Post Strong Year-Over-Year Gains

Business Wire

SAN FRANCISCO -- August 20, 2013

Luxury home values increased in San Francisco, Los Angeles and San Diego in
the second quarter of 2013 compared to a year ago, according to the First
Republic Prestige Home Index™ by First Republic Bank, a leading private bank
and wealth management company.

In the second quarter of 2013, the Index indicated the following:

  *San Francisco Bay Area values climbed 10.9% from the second quarter of
    2012 and 5.0% from the first quarter of 2013. The average luxury home in
    San Francisco is $2.9 million.
  *Los Angeles area values rose 6.1% from the second quarter a year ago and
    3.3% from the first quarter of 2013. The average luxury home in Los
    Angeles is $2.1 million.
  *San Diego area values gained 8.0% year-over-year and 4.9% from the first
    quarter of 2013. The average luxury home in San Diego is $1.7 million.

“This was one of the best quarters in recent history for California luxury
home prices in First Republic’s urban, coastal markets,” said Katherine
August-deWilde, President and Chief Operating Officer of First Republic Bank.
“Limited inventory and growing demand from both U.S. and international buyers
are driving the market. Many properties generated multiple offers. It was a
very strong quarter.”

First Republic Bank produces the Prestige Home Index each quarter with
Core-Logic Case-Shiller, a leading provider of automated property valuation
services and home price metrics to U.S. financial institutions. Historical
results of the Index, which has tracked luxury homes since 1985, are
accessible at www.firstrepublic.com. First Republic Bank is an active lender
in the luxury home market for primary residences and vacation homes.

San Francisco Bay Area Values

The 10.9% gain year-over year was the largest increase in values since the
fourth quarter of 2005. San Francisco values are now the highest since the
fourth quarter of 2008 and are approaching the all time highs of 2007.

In San Francisco, the market was strong. “It’s a healthy, solid market. If
people want a property, they will pay big numbers for it,” said Val Steele of
Sotheby’s International Realty in San Francisco. “We’re seeing very strong
demand and a lack of inventory. The luxury market will continue to do well
here because San Francisco has it all: It is an international city and we
offer great value compared to places like Shanghai, London and Hong Kong.”

In Silicon Valley, there was continued robust demand for luxury homes. “We
have two major buyer pools: successful people in the technology business and
international buyers from China,” said Ken DeLeon of DeLeon Realty in Palo
Alto. “Both groups are quite bullish and many are looking at properties in the
$5 million to $10 million range. They feel very confident. You’re beginning to
see multiple offers, even in the upper end.”

In the East Bay, the market continued to recover. “The market is definitely
picking up,” said Laura Abrams of Coldwell Banker in Orinda. “The high end is
moving, but properties are selling at lower prices. People are getting great
deals. I am cautiously optimistic.”

Los Angeles Area Values

Values on a year-over-over basis have now increased for five straight
quarters.

On the West Side of Los Angeles, the market was very strong. “In Bel Air,
Beverly Hills and Malibu, properties above $5 million were up 10% to 12%,”
said Mike Eisenberg of Keller Williams in Los Angeles. “I think we would have
a bubble in the making if it were just local buyers, but we’re seeing a lot of
multinational investors. Los Angeles values are inexpensive compared to other
metropolitan areas around the world.”

Michael Collins of Coldwell Banker Previews in Los Angeles agreed. “If
something is extraordinary, it will sell for a premium. People want to be in
the Palisades, Brentwood, Bel Air and Beverly Hills, and they will pay up.
I’ve never see such astronomical prices in my 27 years in the business.”

In Orange County, pent-up demand was driving the market. “The first and second
quarters were excellent,” said Jim Turco of Surterre Properties in Newport
Beach. “We had low inventory and high demand. We were seeing multiple offers
and deals are being done more frequently.”

San Diego Area Values

The 8% increase year-over-year was the largest since the fourth quarter of
2005, when prices spiked 13.3%.

“Anything up to $3 million is selling quickly, but homes over that price
aren’t selling as rapidly,” said Judy Corrente of Pacific Sotheby’s
International Realty in La Jolla. “There is not a lot of product. Overall, it
is looking very promising.”

Amy Green of Coastal Premier Properties said the market was doing well. “There
is more momentum, more transactions, and a lot of cash deals, especially in
the high end. It’s very encouraging, compared to last year. There are a lot of
move-up buyers and many overseas buyers from Asia and Europe.”

About The First Republic Prestige Home Index

The First Republic Prestige Home Index™ is the first statistical model of its
kind customized to measure changes in homes valued at more than $1 million in
key California urban markets. Some common features of luxury homes in the
Index: 3,000 to 6,000 square feet, three to six bedrooms, and three to six
bathrooms. San Francisco Bay Area properties include a cross-section of luxury
homes in Alamo, Atherton, Belvedere, Danville, Healdsburg, Hillsborough,
Lafayette, Los Altos, Los Gatos, Mill Valley, Moraga, Orinda, Palo Alto,
Piedmont, Portola Valley, Ross, St. Helena, San Francisco, Saratoga, Sonoma,
Tiburon and Woodside. Properties in Los Angeles represent a cross-section of
luxury homes in Arcadia, Beverly Hills, Calabasas, La Cañada Flintridge,
Encino, Los Angeles, Malibu, Marina del Rey, North Hollywood, Pacific
Palisades, Pasadena, Playa del Rey, Santa Monica, Studio City, and the West
Los Angeles enclaves of Bel Air, Brentwood and Westwood. San Diego properties
represent a cross-section of luxury homes in Carlsbad, Coronado, Del Mar,
Encinitas, La Jolla, La Mesa, Poway, Rancho Santa Fe, San Diego and Solana
Beach. In producing the Index, Fiserv CSW Inc. draws upon its economic
database and years of experience in tracking single-family home values;
collects and cross-checks data from multiple sources; achieves a weighted
balance of validation elements such as repeat sales, comparable sales and
physical home characteristics; and combines this with First Republic’s
extensive local market knowledge.

About First Republic Bank

First Republic Bank (NYSE:FRC) is a full-service bank specializing in private
banking and private business banking. The Bank's wealth management affiliates
offer trust, investment consulting and advisory services. Founded in 1985,
First Republic specializes in exceptional, relationship-based service offered
through preferred banking or wealth management offices primarily in San
Francisco, Palo Alto, Los Angeles, Santa Barbara, Newport Beach, San Diego,
Portland, Boston, Greenwich, Palm Beach and New York City. First Republic
offers a complete line of banking products for individuals and businesses,
including deposit services, as well as residential, commercial and personal
loans. For more information, visit www.firstrepublic.com.

Contact:

Blue Marlin Partners
Greg Berardi, 415-239-7826 (Media)
greg@bluemarlinpartners.com