Luxury home sales in the Bay Area notched up by two-thirds in April compared to last year, pushed by a rallying stock market and continued investment in AI companies, according to Compass Chief Market Analyst Patrick Carlisle.
An enormous amount of wealth is “sloshing around the Bay Area,” he said via email, citing a recent report from consultancy Henley & Partners showing the Bay Area as the top metro for billionaires and second-highest for residents with at least $100 million in “investable wealth.”
Last spring those buyers were largely on the sidelines but this year they are back and buying, according to a Compass report. There were about 450 sales over $3 million in April, and more than 100 deals on $5-million-plus homes, 66 percent higher in both categories than one year ago.
“Luxury” and “ultra luxury” means something different depending on the market, with $5 million and $10 million the Compass threshold in San Francisco, San Mateo, Santa Clara and Marin. In the other counties, homes are generally more affordable, and $3 million and $5 million are the thresholds. Of course, prices can vary widely even within counties, especially in second-home luxury enclaves like Carmel in Monterey County or St. Helena in Napa.
“In some places, a $5+ million home can be a fixer-upper, and in others a large, immaculate mansion on acreage,” Carlisle said.
Silicon Valley sales
Santa Clara County, home to tech giants Apple and Google, has had by far the most sales between $3 million and $5 million from Jan. 1 to May 15 with 590 deals. It also leads in the $5 million to $10 million category with 113 sales.
But San Mateo County, where Atherton, Woodside and Hillsborough are situated, is the biggest leader in $10 million-plus sales. There were 21 sales above the $10 million threshold on the Peninsula so far this year, just slightly less than the rest of the nine-county Bay Area put together. Almost all the seven sales and three pending deals over $20 million were in Atherton.
San Francisco’s luxury market fell behind San Mateo and Santa Clara this year, but the city still had 200 deals over $3 million with 40 of those for condos, co-ops or TICs. Carlisle noted a “dwindling of the tsunami of vastly overdone ‘doom-loop’ stories of last year” and said the tech-focused Nasdaq rally and AI-centered confidence in tech more generally has had a much bigger impact on affluent households than interest rates.
With buyers back, more sellers are confident about putting their homes on the market. There were more than 200 homes over $5 million listed in April in the Bay Area, the highest number in three years.
Fewer homes over $5 million were also pulled off the market without a sale than earlier this spring and the days on market for luxury homes dropped to its lowest level since the market peaked in mid-2022. But higher-priced homes still continue to sit longer and are less likely to go over asking than lower-priced homes, as the buyer pool is smaller and the value of views or specialty finishes can be very subjective.
In San Francisco during the last 12 months, 50 percent of sales under $3 million sold over asking, compared to 40 percent between $3 million and $5 million, 28 percent between $5 and $10 million, and none over $10 million.
Broadly speaking, luxury homes throughout the Bay Area over the last 12 months sold for an average 3 percent below list price, compared to 8 percent off for ultra luxury. Non-luxury properties sold for an average 3 percent over asking, according to the Compass report.
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