As I sit in my office, recovering from Christmas with the family, I begin to wonder how the high end real estate market is doing in San Diego. Each part of San Diego has its own “high end” market, but today, I chose to only search for homes that sold for $5M or more. To my somewhat surprise, I learned that 27 $5M-plus homes/estates/mansions had sold so far this year.
Most of these homes were located in Rancho Santa Fe, La Jolla and in Coronado – no surprise there – with a few others in Del Mar and other coastal neighborhoods. The biggest surprise to me was that only 5 of these were completed with a loan. In other words, over 81% of San Diego’s most expensive home purchases were done with cash. With a total sales volume of almost $181,000,000, this is a lot of cash that people are investing in real estate.
The most expensive sale in 2011, was a $12M home in the La Jolla Muirlands. This 12,203 sqft “home” has 7 bedrooms, 11 full baths and 3 half baths. It also has “2 offices, a theatre, game room, wine cellar, exercise room, 9 fireplaces, garages for up to 7 cars, expansive patios, and an infinity edge pool & spa,” according to the listing. The most expensive sale in terms of price per square foot, was for a Del Mar home that sold for $3463/sqft. This home was a 2Br/3Ba, 1660 sqft home.
In 2010, there were a total of 32 sales in San Diego County, with a price of $5M or more. The highest sales price in 2010 was $10,500,000, for a 4Br/4.5Ba, 6315 sqft oceanfront home in Coronado. However, at $4506/sqft, a 1731 sqft 3Br/2Ba home, also in Coronado, took the title for the most expensive home – location, location, location! The lowest $/sqft was for a 16,281 sqft, 8 bedroom, 9 full bath and 5 half bath home in Fairbanks Ranch, selling for $368/sqft.
Year over year, 2011 had 5 less sales(15%) than 2010, which amounted to more than $95M in home sales. Does this mean that people are losing faith in San Diego’s real estate market? Doubtful. At the higher price points, people tend to buy upon desire and not so much as an investment. Homes are worth what someone is willing to pay and this is most evident at these higher price points. After all, how do you comp(find comparable sales) for a 12,000 sqft mansion in Fairbanks Ranch?
Land is scarce in San Diego and it’s clear that people are willing to pay for a view and/or location. Markets will rise and fall, but in the end, there’s only one San Diego and clearly, people are willing to pay for it. If you have any questions about SD real estate, please don’t hesitate to contact me. Denny Oh 858-243-2092 [email protected]