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Luxury home sales surge in region

Median price slips but transactions up 'solidly'
By: Art Garcia for The Telegraph
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More folks are living high in El Dorado Hills, Folsom, Granite Bay and other parts of the Sacramento region, with sales of luxury homes jumping 29 percent in this year’s recently ended third quarter, compared with the same period last year.

There were 219 sales in the region of homes priced at more than $750,000 in the third quarter, up from 170 transactions a year earlier.

Sales also were up “solidly” in the third quarter from the second quarter’s 188 transactions, according to a new report by Coldwell Banker Residential Brokerage, a big player in luxury real estate deals.

The information comes from Multiple Listing Service data on all homes in the region that sold for more than $750,000 in the third quarter.

Median sale price of a luxury home in the quarter slipped to $860,000, off 8.9 percent from the median a year ago and down 6.3 percent from the second quarter, when the median price was $917,500.

Other key indicators of the luxury market show homes sold faster on average than in the prior quarter and 2013’s third period.

El Dorado Hills and Granite Bay each had 39 luxury sales in the recent third period, and Folsom had 15.

Sellers received 97 percent of their asking price, on average.

“When we saw the housing  recovery that began a few  years back, a lot of people were looking at the Sacramento region as sort of a value place, and that included all segments of the market, the luxury end as well,” said Kris Vogt, regional president of Coldwell Banker.

“What we’re seeing more and more that bodes well for our community and the sustainability of numbers like these is that the region is really coming into its own, in terms of job growth and consumer confidence at the local level and the fact we’re a vibrant region in a place people really fall in love with,” he said.

“Luxury home buyers and sellers get more for their money in our area than in the Bay Area, and what we’re really hearing more and more from people who are buying here is the lifestyle they find here, as well as an affordable luxury home.”

Unlike the last housing boom, the region is becoming more of a destination for capital and for startups.

“There are some similarities to the last run-up in values but we are just a stronger, more vibrant region economically,” said Vogt.

Many of the luxury home buyers here are from the San Francisco Bay Area, people who’ve accumulated great equity in their homes, are cashing out and looking to exchange the big city environment for something smaller, more rural.

And there are luxury-level buyers from Southern California, as well as sales to foreign buyers, especially from Asia and Eastern Europe.

Then there are the locals who have risen in their corporate positions who are moving up and those who have recently sold their companies and are using some of those gains to purchase luxury homes, said Katie Minor, manager of the El Dorado Hills Coldwell Banker sales office.

“People have more equity in their homes, which allows them to move up, and there’s been a pent-up demand from buyers as well,” she said.

Diana Pena, a sales agent with RE/Max Gold in Folsom, has been seeing “a lot” of cash offers for homes costing $750,000 and up in Folsom and El Dorado County.

She recently sold a Shingle Springs home that’s now in escrow, a $1 million cash deal with a buyer from Europe. A college professor in Chicago is coming to talk to her about a $1 million home purchase in the area.

Minor notes that the mortgage market is still “very tight, and it’s taking a bit longer to close, on average, but we’re also seeing a lot of cash buyers in the upper end of the market.”

“Good sales also are being seen in the entry and mid-level local area markets,” Minor noted.

The inventory of luxury homes “for this size of an area is still very tight in all price ranges,” she said. In October last year, luxury homes were on the market an average of 77 days in El Dorado Hills. This past September, it was 54 days.

In October 2013, there were 53 homes for sale priced at more than $850,000; in September this year there were 58.

 

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