SoCal Mortgage Blog

Million-dollar home sales plummet in Golden State 

The number of California homes that sold for $1 million-plus declined for the fourth consecutive year in 2009, the result of buyer reticence, a difficult mortgage market and several years of price drops that tugged the value of many homes below the million-dollar threshold, a real estate information service reported.

A total of 18,621 Golden State homes sold for a million dollars or more last year. That was down 23.8 percent from 24,436 in 2008. In 2007 it was 42,506; in 2006 it was 50,010; and in 2005 it peaked at 54,773. Last year was the lowest sales count since 2002, when 15,703 were sold, according to San Diego-based MDA DataQuick.

Total California home sales - including all price levels -increased 16.9 percent last year, to 460,166 from 393,703 in 2008. One in 25 homes sold for a million dollars or more last year, while the year before it was one in 16, and in 2006 it was one in nine.

"Prestige home sales are a unique sub-category of the real estate market. The buyers and sellers respond to a different set of motivations. In the multi-million-dollar price ranges, decisions are largely discretionary and aren't as dependent upon jobs, prices and interest rates the way they are for most buyers and sellers," said John Walsh, DataQuick president.

"Traditional million-dollar markets are holding up relatively well, while expensive markets that emerged four or five years ago are not," he said.

Million-dollar home sales in Riverside County dropped 48.6 percent last year, while they dropped 13.3 percent in Los Angeles County.

Statewide, there were 332 sales for more than $5 million last year, 228 sales were in the $4-$5 million range, 590 in the $3 million range, 1,902 sales in the $2 million range, and the rest - 83 percent - between $1 million and $2 million.

About 1,900 of the homes that sold statewide last year for less than $1 million had previously sold for $1 million or more. The median date of the prior sale was April 2006; the median price decline between the 2009 sale and the previously $1 million-plus sale was about $420,000. The median percentage decline was about 35 percent.

MDA DataQuick is a division of MDA Lending Solutions, a subsidiary of Vancouver-based MacDonald Dettwiler and Associates. MDA DataQuick monitors real estate activity nationwide and provides information to consumers, educational institutions, public agencies, lending institutions, title companies and industry analysts.

The numbers include home sales where it could be determined from public records that there was a buyer, a seller, that money changed hands, and that there was a legal transfer of property ownership. Not included were property swaps, sales of multiple lots, sales where no price or loan amount was available, teardowns, and large farm or ranch properties. Sales to companies and trusts were included.

The most expensive confirmed purchase last year was a 22,721-square-foot, 9-bedroom, 10-bathroom Bel Air house built in 2008 which went for $26,500,000 in July. It was also the largest million-dollar home sold last year.

The communities where virtually all home sales were in the million-dollar category were Portola Valley and Atherton in San Mateo County, Newport Beach in Orange County, Ross in Marin County and Rancho Santa Fe in San Diego County.

Newly-built homes accounted for 1,457 of last year's $1 million-plus sales, down 50.3 percent from 2,933 for 2008. There were 1,542 condo sales in the million-dollar category, down 34.7 percent from 2,362 the year before. Most $1 million-plus condos were sold in San Diego, Los Angeles and San Francisco.

The median-sized million-dollar home was 2,646 sq.ft., with 4 bedrooms and 3 bathrooms. The median price paid per square foot for all million-dollar homes was $605, down 10.1 percent from a revised $672 in 2008. For the overall market, the square-foot median declined 20.7 percent from $188 in 2008 to $149 last year, DataQuick reported.

Last year 4,925 Notices of Default, the first step of the formal foreclosure process, were recorded on homes that previously had sold for a million dollars or more. The number of Trustees Deeds, or the actual loss of a home to the foreclosure process, totaled 2,698 for those homes that previously sold for $1 million-plus.

Around 29 percent of the $1 million-plus buyers paid cash, up from 24 percent in 2008. In the over-$5 million category, two thirds of the purchases were cash. Of those who did finance their purchase, the median down payment was 39.4 percent of the purchase price. The lending institutions most willing to provide mortgage financing for $1 million-plus homes were Bank of America, Wells Fargo and Union Bank.

There are 8.52 million homes in California. Of those, 241,456 are assessed for more than a million dollars by county assessor offices, down 5.2 percent from 254,745 in 2008, DataQuick reported.

Million Dollar Home Sales, ranked by 2009 sales #s

		2008	2009	2009's Most
Zip	Community	Sales#	Sales#	Expensive
94010	Hillsborough	274	261	$8.00 mill.
90266	Manhattan Beach	296	260	$11.65 mill.
92037	La Jolla	246	259	$18.15 mill.
90049	Brentwood	219	254	$14.85 mill.
94025	Menlo Park	258	252	$4.25 mill.
95014	Cupertino	263	215	$3.13 mill.
94024	Los Altos	204	211	$4.30 mill.
95070	Saratoga	260	206	$4.59 mill.
92651	Laguna Beach	173	203	$13.73 mill.
90272	Pacific Palisades	214	193	$17.55 mill.
90210	Beverly Hills	192	190	$19.90 mill.
90274	Rolling Hills Estates	152	187	$6.40 mill.
92130	Del Mar	247	179	$3.30 mill.
94022	Los Altos	157	174	$9.95 mill.
92660	Newport Beach	158	166	$9.50 mill.
94506	Danville	213	151	$3.40 mill.
94306	Palo Alto	134	145	$2.70 mill.
94539	Fremont	160	145	$3.10 mill.
91011	La Canada Flintridge	110	143	$4.80 mill.
95032	Los Gatos	156	142	$4.25 mill.
91108	San Marino	110	141	$4.55 mill.
92657	Newport Beach	120	141	$9.41 mill.
90275	Rancho Palos Verdes	181	140	$5.75 mill.
94303	Palo Alto	122	137	$4.05 mill.
93108	Santa Barbara	175	133	$11.66 mill.