Bay Area Luxury Homes Gain Value While Others Drop

In the Bay Area for most of this year, wealthy homebuyers haven’t been feeling the heat of the slumping regional housing market.

While buyers across San Francisco and Silicon Valley deal with high mortgage rates and equally high prices, many buyers in wealthy enclaves like Atherton and Woodside have been able to juice the local market, often in all-cash offers, the San Francisco Chronicle reported.

The median sales price of a home in the top 5 percent of home prices in the San Francisco metro area, defined by Redfin as the city plus San Mateo County, was about $6.4 million from August to October, according to a new Redfin report cited by the Chronicle. That makes it far and away the highest of the 50 most populous metro areas in the U.S. and reflects a 5 percent rise from the same period last year. The San Jose metro area, with the country’s second-highest median luxury sales price at $5.6 million, saw an increase of nearly 12 percent.

At the same time, the median price of a mid-cost home in the Bay Area fell by 1 percent to $1.5 million. The influx of high-ticket buyers working in the tech and burgeoning artificial intelligence sectors has helped luxury home prices skyrocket in enclaves like Portola Valley, Atherton and Woodside, as well as San Francisco itself, as competition over luxe homes leads sellers to increase prices.

“The tech wealth effect is putting real liquidity into the hands of local buyers,” Arrian Binnings, an agent with Christie’s International Real Estate, told the Chronicle. “After such an epic run-up, many are taking some chips off the table and rotating those funds into local real estate.”

In San Francisco, demand for luxury homes is so high that it’s actually led to a shortage of mansions for well-to-do buyers looking to pick up some property. Sales for high-end homes are up 14 percent year-over-year, while inventory is down about 4.5 percent.

In the past two months alone, several properties in pricey Peninsula cities have traded hands.

Last month, the Villa del Prato estate in Portola Valley sold for $56 million to venture capital investor Bandel Carano. In August, investor Marc Andreessen sold his Atherton estate for $27 million. And in September, the historic 74-acre Green Gables estate set a Bay Area sales price record for the year in an $85 million transaction.

— Chris Malone Méndez