Sales of Million-Dollar Homes Soar to Record

Never mind the slow economy. California’s luxury home market was hotter than ever last year.

Sales of million-dollar homes skyrocketed 45.5% statewide to a record 13,828, far surpassing the previous high of 11,365 in 2000, according to figures released Tuesday. The surge was driven by across-the-board appreciation that pushed more homes into the high-end market and by the growing number of equity-rich homeowners who traded up to more expensive housing.

The pace of million-dollar sales was strongest in Southern California, which claimed title to last year’s most expensive confirmed sale: a five-bedroom Bel-Air estate on two acres that went for $15 million in August, according to DataQuick Information Systems, which compiled the sales figures through property records.

But unconfirmed sales as high as $30 million have been reported in Beverly Hills and San Francisco, according to brokers.

“It’s incredible,” said Scott Gibson, president of Coldwell Banker’s Los Angeles division, where million-dollar-plus homes make up half of the company’s Westside listings. “We really have gone to $2 million as a starting point as to what an estate might be.”

Indeed, many of the million-dollar homes sold in California involve properties that don’t resemble anything like the walled and sprawling estates usually associated with luxury housing. The typical seven-figure home sold last year had four bedrooms, three baths and measured 2,885 square feet -- big but hardly palatial. Last year, 617 condominiums went for a million or more.

And in some areas, such as the north end of Santa Monica, a million bucks may be just enough to get you a 7,500-square-foot lot -- with nothing on it, said broker Michael Greenwald.

“It’s certainly not mansion range, not even close on the Westside,” he said.

California typically accounts for the majority of million-dollar home sales in the country. The luxury end of the market still represents just a fraction of total home sales. More than 339,500 homes changed hands in Southern California last year, with the median price rising 11.6% from 2001 to $269,000.

The explosive growth at the top belies the shaky economy, with tech layoffs in the Bay Area, the sluggish stock market and government budget woes casting a pall over the state economy. In fact, analysts have been looking for signs of a housing slowdown, especially in the high end.

But unlike the late 1990s, when the Wall Street and dot-com boom fueled sales of pricey homes, many of the buyers last year were ordinary folk taking advantage of the enormous run-up in equity in their existing homes as well as low mortgage rates, area brokers say.

“They are the average guy with the average job,” said Newport Beach broker Ron Millar of his luxury home buyers. “They’re people who bought their homes for $500,000 and are now selling them for $800,000.”

There were plenty of ultra-high-end buyers too.

Statewide, 88 homes sold for more than $5 million each last year, and 86 fetched $4 million to $5 million.

About 17% of the buyers of million-dollar-plus homes last year paid cash, according to DataQuick. Of those who financed their purchases, the median down payment was $450,000.

“I didn’t expect this kind of performance,” said G.U. Krueger, a vice president at Institutional Housing Partners, an Irvine-based real estate venture firm. “Even rich people seem to like low mortgage rates.”