The luxury market—defined by the top 10 percent of an area’s sales—acted in general accordance with the larger Bay Area market, exemplifying both minor dips in sales volume and minor increases in average sales price. However, compared to the more affordably-priced Bay Area housing sector, the luxury market did experience a bit more volatility from region to region.
Market activity in the North Bay was the most severe outlier from the stability that largely defined Q3 2016. The region’s luxury sales took a noticeable average home sales price hit, with the $2.62 million average sale down 12 percent year-over-year. Yet, it’s worth noting that such behavior isn’t exactly a cause for alarm. Marin, Sonoma and Napa Counties had all experienced staggering average sales price highs in the first two quarters of 2016, with Marin County’s luxury market gaining 10 percent year-over-year in Q2 2016. The pricing drop-off this quarter can mainly be attributed to the large number of high-priced homes that left the market in early 2016, resulting in very little of the same caliber inventory for the region in Q3.
San Francisco and the Mid-Peninsula on the other hand continued to see average sales prices grow. The average luxury sale in San Francisco of $4.43 million was a nine percent improvement year-over-year, and San Mateo County’s $4.83 million average sale was a 3 percent gain. It should be noted that sales volume was down 9 percent year-over-year in both counties. Again, this was due to the same luxury inventory shortage experienced in the North Bay. The Mid-Peninsula’s strong pricing gains included eight of the top 10 Bay Area sales—all of $10 million or more. This included two $22 million closings and one $30 million sale.
Then there was the East Bay, which held course with the market’s broader theme of stability. The $1.764 million sale here was nearly identical to the previous year’s mark, as were the 576 total home sales. One final note that should add to buyer confidence is that average DOM was up by at least 13 percent in each luxury region.
BAY AREA LUXURY MARKET SHARE
Showing a bevy of eight-figure sales, the Mid-Peninsula led all regions with 37 percent of all sales and 40 percent of cash volume. Despite a down quarter, the North Bay still managed both 22 percent of sales and cash volume. The East Bay added 25 percent of all sales and 21 percent of cash volume. While San Francisco posted 16 percent of all sales and 17 percent of cash volume. The sum of these transactions was 967 luxury sales totaling $2.572 billion.