california homes Archives - Southern California Luxury Homes

California homes sales in the $1+ million range juxtapose homes priced under $500,000. For 2017 Q1, fewer homes priced under a half million dollars were on the market. And more than the usual number of $1+ million homes sold.

Why Trend towards Luxury Homes

Let’s define luxury homes here. Prices over $1 million ranges from beach cottages to palatial estates. In Southern California, we’ re not just looking at castles. Many home prices in San Jose, Los Angeles, and San Diego are rising because of build out. There are few places to develop on the ocean or in the mountains.

Although we never know for sure all causes for certain events, we can scan the horizon for some of them. Let’s discuss some major components.

The exalted stock market is handing out more cash.
Job growth and higher paying jobs are available.
More employees want to live close to their companies and amenities.
Investors are turning money into real estate investments.
Consumer confidence.
Interest rates remain low.
Inheritances from the “savings minded” generation are in play.
Location in a pricey area may be more important than features of a home.
Price appreciation is pushing more homes over $1 million.

Stats for Luxury Homes Q1 2017

Let’s turn to the May 17, 2017 article by Andrew LePage of Core Logic. “California Million-Dollar Home Sales Climbed to a Q1 Peak as Stocks Soar.”

Approximately 11 percent of the total homes sold for $1 million or more. To be more exact, 10,562 buyers purchased homes priced at $1 million or more during Q1 this year. The record in this category was set last spring. Almost a third of the buyers paid cash.

The average luxury home size was 2739 square feet, four bedrooms and three baths. The average lot size was 17,368 square feet. The 92620, 92130, 95125, 92037, and 92651 zip codes saw more $1+ home sales than others.

Over 2500 buyers purchased homes priced over $2 million this winter. Cash was the means of exchange for 43 percent of these properties. The record of 3,508 sales $2+ million was set 2016 Q2. We’ll see what happens during Q2.

Stats for Homes Priced below $500,000

On the other end of the spectrum, we see more homes appreciating and moving out of the under $500,000 range. Sales in this category plummeted to arrange not seen since 2008 Q 1. After all, there are fewer homes available to buy in this price range. Inventory is tighter than ever. Even so, almost 60 percent of total homes sold during 2017 Q1 were priced below $500,000.

Buyers searching for real estate priced under $500,000 compete with a new cash flow. In areas with great demand, the availability of money is driving up prices. So, it is good to prepare for the unexpected bidding war.