Author: Rainy Hake, Executive Vice President, Alain Pinel Realtors
This article ran in the April 18th, 2014 Palo Alto Daily News publication Premier Homes, pg 10.
Last week, it was announced that the “Copper Beech Farm” estate in Greenwich, Connecticut sold for $120 million. While the property sold for $70 million below the original asking price of $190, the 51-acre estate still captured the title as the single most expensive home sale in the country ever.
While the Bay Area might not be home to the highest single-family home sale in the nation, it is no stranger to luxury. The highest property currently on the market is the impressive $69.8 million “Flood Estate,” sitting on over 90 acres in Woodside. Communities in the Bay Area – including Atherton, Menlo Park, Los Gatos, Los Altos Hills, and many more are known for their high-end homes that fetch some of the highest average prices in the country. It is no surprise that they are consistently among the most expensive zip codes in the nation.
As we wrap up the first quarter of the year, the report remains much the same as it has in the previous year – with constrained inventory, prices are continuing to elevate, while the number of sales are slightly down when compared to last year. It will really be this next quarter that communicates the true economic direction for the year, as warmer weather and seasonal changes usually draw more sellers to the market.
While this is the case for the general real estate market, when you look at the highest price points in the Bay Area, you will see a more favorable story. If you look at Santa Clara and San Mateo counties – there are a considerable number of homes over $3 million on the market (94 and 95, respectively). While this may not seem like many, when you look at supply and demand at this price point it is reflective of a relatively healthy inventory.
What is most interesting in the numbers is the year-over-year increases we are seeing. While the rest of the market is slightly down when it comes to number of sales (-9% in Santa Clara County and -6% in San Mateo County), we are seeing high double or even triple-digit increases in the number of sales of homes priced over $3 million and $5 million – and 2013 was a good year! For both Santa Clara and San Mateo counties almost half of the quarter’s sales over $5 million happened in March alone.
While these numbers are fairly impressive, they are actually understated because these numbers are taken directly from the MLS – and at the highest ends of the market, we see more “off-market” listings and transactions. So, if anything, this means that the actual activity in the luxury market is even better than statistically reported.
As we enter the spring, one thing is clear – the luxury and high-end market is alive and well in the Bay Area.
Rainy Hake currently serves as the Executive Vice President of Alain Pinel Realtors where she plays a role in managing the strategic direction of the company, and also oversees the Marketing, Technology, Training and Strategy departments. She has over 15 years of experience in the real estate industry and holds and MBA from the University of Oxford.