Million-Dollar Mania: Record High-End Home Sales

Sales of California homes costing $1 million or more reached record levels during the second quarter of this year.

A total of 2,130 homes were sold from April to June, a year-over-year increase of 34.4%, according to Acxiom/DataQuick, a real estate information company.

The sales total exceeded the previous peak set during the third quarter of last year, when 1,607 homes changed hands.

An analysis of the sales of expensive homes revealed that values are appreciating between 8% to 10% annually--a rate in tune with the rest of the California housing market.

Increased demand and rising property values helped push a growing number of homes into the million-plus category.

“There’s an awful lot of homes that were in the almost $1 million market that have passed the threshold,” said John Karevoll, an analyst for Acxiom/DataQuick. “At the same time we have a frenzy for $1 million homes going on up in the Bay Area.”

Given the size of its housing stock, the nine-county San Francisco Bay Area had a disproportionately high number of sales of million-dollar-plus homes during the second quarter, when 913 sales were recorded--up 67.2% from 546 a year ago.

Strong demand among Bay Area buyers translated into bad news for Beverly Hills 90210, which was bumped for the second consecutive quarter from its long-held position as busiest ZIP Code for million-dollar-plus home sales. Beverly Hills finished fifth in the state, with 40 sales.

The new leader is Hillsborough 94010 with 79 sales, followed by Saratoga 95070 with 70 sales. Hillsborough is about 30 miles south of San Francisco, and Saratoga is 10 miles southwest of San Jose.

Beverly Hills may have slipped in the rankings, but Southern California continues to dominate the top-end market. The number of Southern California homes that sold for $1 million or more hit a record of 1,084 during the second quarter, compared to 937 during the same period a year ago.

“Southern California is still the king of the hill,” Karevoll said. “There are four times as many homes here than in the Bay Area.”

The busiest Southern California ZIP Codes for million-dollar-plus home sales were Rancho Santa Fe 92067 with 68 sales, La Jolla 92037 with 44 sales, Beverly Hills 90210 with 40 sales, Pacific Palisades 90272 with 39 sales and Rolling Hills Estates 90274 with 34 sales.

The Acxiom/DataQuick report includes home sales where it could be determined that there was a buyer and a seller, that money had changed hands and that there was a legal transfer of property ownership. Sales to companies and trusts were also included.

But in the world of luxury housing, it is not uncommon for buyers to engage in property swaps or purchase multiple lots to seal a deal, making it difficult to monitor their activities by relying on public records alone.

When such deals are included, the total number of homes selling for more than $1 million is actually much higher, according to Cecelia Waeschle, a broker with Coldwell Banker-Jon Douglas Co. of Beverly Hills who monitors closely held transactions.

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So far this year, Waeschle has counted 175 homes that have sold for $2.5 million or more in the Westside neighborhoods of Beverly Hills, Bel-Air, Holmby Hills, Santa Monica, Pacific Palisades, Malibu, Hancock Park and Sunset Strip.

By comparison, 143 homes sold during the same period last year.

Waeschle believes the sales of so many expensive homes are being fueled by a newly moneyed segment of the population that is entering the housing market and by rising home values, which have ignited the move-up market.

“When prices were low people weren’t selling because they owed more on their homes than they were worth,” Waeschle said. “Those same people have now caught up and can afford to move up and as a result they’re selling their homes. There’s been a lot of pent-up demand.”

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Million-Dollar Club

Sales of million-dollar homes in California through the second quarter of 1999.

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ZIP 2ND QUARTER 2ND QUARTER HIGHEST CODE CITY SALES IN ’98 SALES IN ’99 PRICE IN ’99 94010 Hillsborough 46 79 $3.59 million 95070 Saratoga 48 70 $4.70 million 92067 Rancho Santa Fe 73 68 $5.69 million 94022 Los Altos 42 63 $5.85 million 92037 La Jolla 47 44 $3.98 million 90210 Beverly Hills 51 40 $5.15 million 94920 Belvedere Tiburon 17 40 $5.10 million 90272 Pacific Palisades 39 39 $2.16 million 94024 Los Altos 16 35 $2.28 million 95030 Los Gatos 22 35 $2.29 million 90274 Rolling Hills Estates 28 34 $3.21 million 90266 Manhattan Beach 16 33 $3.09 million 90265 Malibu 34 32 $3.43 million 94941 Mill Valley 15 32 $3.50 million 90049 Brentwood 35 29 $3.62 million 94062 Woodside 8 29 $5.20 million 90402 Santa Monica 21 28 $3.25 million 90275 Rancho Palos Verdes 11 26 $2.20 million 92651 Laguna Beach 31 26 $5.15 million 94025 Menlo Park 18 26 $2.00 million 92024 Encinitas 9 25 $1.80 million 91302 Calabasas 23 24 $2.73 million 94402 San Mateo 10 23 $2.70 million 94506 Danville 12 23 $3.62 million 92014 Del Mar 14 22 $4.30 million

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Source: Acxiom/DataQuick Information Systems