Rising stock prices contributed to sales of 10,562 California homes valued at $1 million or more during the first quarter of this year. That represents a year-over-year increase of 11.7% and sets a new record for million dollar home sales in the first quarter.
Sales of homes valued at $2 million or more rose to 2,523 in the first quarter, up 11.8%, and also a new record for first-quarter sales.
In addition to rising stock prices, which generally make buyers feel wealthier and encourage investment in real estate, job growth in California and improved consumer confidence are among the drivers of luxury home sales, according to CoreLogic.
Total first-quarter home sales in California reached a five-year peak, but the number of sales of homes priced below $500,000 was the lowest in any quarter for the past nine years. CoreLogic noted:
Home price appreciation and tight inventories in many markets have led to fewer sub-$500,000 sales. Last quarter 59.3 percent of all sold homes were priced below $500,000 – roughly the same level as during the previous three quarters and the lowest for any quarter in nearly a decade, since third quarter 2007.
The five zip codes with the highest numbers of million-dollar-plus home sales were 92620 (Irvine), 92130 (San Diego), 95125 (San Jose), 92037 (La Jolla) and 92651 (Laguna Beach).
CoreLogic also highlighted the following details on luxury home sales in California:
- Roughly 78 percent of the $1 million-plus sales last quarter were existing (not new) detached houses, up from about 75 percent a year earlier but below the 10-year quarterly average of about 82 percent. About 11 percent of last quarter’s sales were existing condos, roughly the same as a year earlier and above the 10-year quarterly average of around 9 percent.
- About 31 percent of the homes that sold for $1 million or more last quarter were purchased with cash, while nearly 43 percent of multi-million-dollar sales were bought with cash.
- The average size of a $1 million-plus home sold last quarter was 2,739 square feet, down from a 10-year average of 3,064 square feet. For resale detached houses the average was 2,825 square feet, while for resale condos it was 2,053.
- On average, $1 million-plus homes sold last quarter had four bedrooms and three bathrooms.
- The average lot size for a $1 million-plus home sold last quarter was 17,368 square feet, down from a 10-year average of 19,370 square feet (for homes on 5 acres or less).
California’s all-time high for the total number of $1 million-plus sales was 15,222 in the second quarter of 2016, the same quarter when $2 million-plus home sales set a record of 3,508.