The Bay Area’s luxury housing market turned in another strong performance in September, according to Coldwell Banker Previews latest luxury market reports released this week. But there are indications around the region that the red-hot luxury market may finally be cooling off ever so slightly as we head into the fall and winter months.
Sales of $2 million and up homes in San Francisco surge 53 percent in the third quarter of the year (July-September) compared to the same period last year. There were 116 high-end sales during the three-month period compared to 76 a year ago. And the median sale price climbed 5.6 percent year over year.
The upper end of The City’s luxury market was particularly strong with 51 sales over $3 million vs. 29 last year, and 31 sales in excess of $4 million, more than double a year ago. The grand prize was a six-bedroom, seven-bath 8,800 square foot mansion in Pacific Heights that went for $18 million.
Silicon Valley’s luxury market also was quite strong last month with sales of $1.5 million-plus properties jumping 41 percent compared to last September. A total of 131 luxury properties changed hands last month, up from 93 last year. And there were 20 sales over $3 million, more than double the number last September.
The same story was echoed in Marin County, which posted a 34 percent rise in million-dollar sales. The capper was a 15,000 square foot mansion with seven bedrooms and 10 baths in Belvedere that went for a whopping $24.5 million.
Finally, across the Bay, million-dollar sales in Alameda and Contra Costa counties spiked 49 percent last month. There were 189 luxury sales in the East Bay, up from 127 last September. Fourteen homes sold for more than $2 million, up from nine a year ago.
But there are signs that the luxury market is easing a little as we move toward the end of the year. Sales in September were markedly lower in all regions compared to August. Some of the drop is due to normal seasonal declines, but perhaps not all.
In talking with our local offices, we’re seeing just a bit of cooling in the marketplace. It’s still a very healthy market by historical standards, just not quite as frenetic as it was three or six months ago. There still are multiple offers on many homes, but not all. And where there are multiple offers, the number might be two or three compared to eight or 10 before on prime properties.
While inventory is still low in most communities, it is gradually increasing, giving buyers more options to pick from and leaving them with the sense that they don’t have to rush their decision as they had to earlier this year.
It will be interesting to see what the coming weeks will bring before year-end. But realistically, we couldn’t sustain the frenzied seller’s market forever. And if we are seeing the scales move back into a better balance between buyers and sellers, that may not be a bad thing for the long-term health of the local housing market.
Below is a market-by-market report from our local offices: