San Francisco Luxury Home Values Climb

SAN FRANCISCO—Luxury home values continued to rise in San Francisco in the third quarter of 2014 compared to a year ago, according to the First Republic Prestige Home Index by First Republic Bank, a leading private bank and wealth management company. The Index indicated that San Francisco Bay Area values gained 14.3% from the third quarter of 2013 and 3.8% from the second quarter of 2014.

The average luxury home in the region is at an all-time high of $3.44 million, says the report. Katherine August-deWilde, president of First Republic Bank, says that "Price increases continue to be driven by low interest rates, limited inventory and a good economy.”

She adds that “Luxury properties are routinely selling for over the asking price and often with multiple offers.”

Prices climbed due to continued demand, adds Malcolm Kaufman of Alain Pinel in San Francisco. “The market throughout San Francisco was strong through the third quarter. I see no tapering for the balance of the year.”

Kaufman adds that “There are just not enough single-family homes for the expanding population. Developers cannot build fast enough to meet demand.”

In Silicon Valley, the market remained very active. “Our third quarter was perhaps our strongest ever,” notes Pat Kalish of Alain Pinel in Palo Alto. "Inventory remains very low. Prices are up, and in some cases, are 50% higher compared to the third quarter last year. Multiple offers are the rule. Only rarely are we seeing single offers, and even those often exceed the list price.”

In southern Marin, values also moved higher. “There are a lot of people vying for homes in the $2 million to $3 million range,” says Ken Dara of Decker Bullock Sotheby's International Realty in Mill Valley. "Below that, the market is even crazier. Above $4 million, houses are moving, but there are fewer buyers. In the high end, the home has to be perfect.”