Danville / Alamo Area Real Estate: Luxury Home Market Another Solid Year
Last Year, 2016, was another solid year for Luxury Homes sales in our area. I have defined Luxury Homes to include homes that are 5,000 square feet and larger sitting on a premium lot that is between ½ and 1 full acre, equipped with a pool. This definition has been overlain on the geographies including Alamo, Blackhawk, Danville and Diablo, basically what in my personal view comprises the Danville Area.
The Luxury Home Market bottomed in 2010 both in terms of average price and dollars paid per square feet. At that time you could have bought a 5,800 square ft. home for an average price of about $1.9 million with a value of $327 per square foot. Those prices were nearly 48% below the current market for a Luxury Home.
During the Luxury Home Market peak in 2007, only 14 homes sold, but they did so with an impressive average price of $2,920,833 and an average square foot price of $506. Technically speaking, the Luxury Market in our area has yet to recover completely. In order to match the 2007 peak, Luxury Home square foot price will need to increase on average another 4%. Although when you look at units sold and average sold price, there is a strong argument that it may have already recovered.
Although the line of ascent from the bottom in 2010 has not been perfectly straight, it has for the most part, been improving. In 2016 sales happened at a rate of slightly more than 2 per month. Days on market were at 95, about 3 weeks longer than 2015. That’s fewer than in 2012, but more than any year since then. Year to date in 2017 two Luxury Homes have sold and one is currently pending. This puts the Luxury Home Market behind the sales pace of the last couple of years and something to pay attention to.
There are currently 15 Luxury homes on the market. This is unchanged from 2016. Their total days on market range from 5 to 242 days. These active listings carry an average list price of $3,212,187compared to last year’s list price of $3,643,617 and an average square foot price of $537 compared to $550 last year. It’s hard to know if this 3.5% decline signifies a change in market direction or if it is an anomaly.
The good news for Luxury Home sellers is that the market has recovered significantly from the downturn and the market is not flooded. This market has moved very far, very fast and may be taking a breather. Given the roughly 12% reduction in year over year list price, my personal view is I don’t expect Luxury Home prices to increase this year. They might even be lower than last year. When I write about the Luxury Market next year, it will be interesting to see how it shakes out.
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Joe and Nancy Combs, The Combs Team, have a high degree of focus on Danville Real Estate Market and Alamo Real Estate Market and sell Real Estate throughout the East Bay. As always, if you have any questions about the Alamo and Danville California real estate markets, or finding that perfect home for sale in the East Bay, please let The Combs Team know! Call Joe Combs 925-989-6086 or Nancy Combs 925-351-6999.
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