California Million-Dollar Home Sales Hit An All Time High

Tyler Durden's picture

At the end of April, we showed that the California housing market is getting just a "little frothy" again, when in the span of a few days a simple 2-bedroom house sold for 40% above asking.  Now, according to a recent analysis by CoreLogic it appears that this was not a one-off event, because as many Californians struggled to gain a foothold in homeownership early this year, they were hindered as a surging stock market and other forces lifted sales of $1 million-plus homes to the highest level ever for a first quarter. 

In a blog post by CoreLogic's Andrew LePage, the real estate consultancy reports that the number of California homes that sold for $1 million or more totaled 10,562 during the January-through-March period, up 11.7% year over year and the highest on record for a first quarter. Luxury homebuyers purchased 2,523 homes priced at $2 million or more in the first quarter, up 11.8% year over year and also a record for a first quarter (Figure 1). 

Maybe it's just another opportunity to blame the Fed: historically there’s often been a correlation between a rising stock market and an increase in luxury home sales (Figure 2). Higher stock values can make potential homebuyers feel wealthier and in some cases stock proceeds are reinvested in real estate. Job growth and higher consumer confidence are among the other likely drivers of the record $1 million-plus sales last quarter.

Or maybe just simple math: as price appreciation continues, more homes reach or exceed the $1 million mark.

On average, $1 million-plus homes that sold last quarter were a bit smaller, and situated on smaller lots, compared with the average home and lot size for $1 million-plus sales over the past decade (more on this below). Last quarter’s share of $1 million-plus sales that were newly built homes – 11 percent – was lower than a year earlier, when it was 13.9 percent, but higher than the 10-year quarterly average of 8.4 percent. While the number of sales of existing (resale) $1 million-plus homes hit a first-quarter record high in this year’s first quarter, sales of $1 million-plus newly built homes were about 12 percent lower than a year earlier and about 30 percent below the first-quarter record set in 2006.  

According to CoreLogic, California’s all-time high for the total number of $1 million-plus sales was 15,222 in second quarter 2016, which is also when the state experienced an all-time high of 3,508 sales of $2 million-plus homes.

Meanwhile, even as total California home sales – including all price levels – last quarter were the highest for a first quarter in five years, the number of sales of homes priced below $500,000 was the lowest for any quarter in nine years, since first quarter 2008. Home price appreciation and tight inventories in many markets have led to fewer sub-$500,000 sales. Last quarter 59.3% of all sold homes were priced below $500,000 – roughly the same level as during the previous three quarters and the lowest for any quarter in nearly a decade, since third quarter 2007 (Figure 3).

Last quarter the share of homes that sold for $1 million or more – 10.9 percent – was the second-highest on record for any quarter, behind 11.7 percent in second quarter 2016. The share of all homes that sold last quarter for $2 million or more – 2.6 percent – was also the second-highest on record, behind 2.7 percent in second quarter 2016.

Of the homes that sold for $1 million or more last quarter, nearly 77 percent sold for $1 million to $2 million, and the vast majority (91 percent) sold for no more than $3 million.... which probably means that when the Chinese finally leave Canada and hit California, watch out.

Other highlights from California’s $1 million-plus home sales in first quarter 2017, per CoreLogic:

  • Roughly 78 percent of the $1 million-plus sales last quarter were existing (not new) detached houses, up from about 75 percent a year earlier but below the 10-year quarterly average of about 82 percent.
  • About 11 percent of last quarter’s sales were existing condos, roughly the same as a year earlier and above the 10-year quarterly average of around 9 percent.
  • About 31 percent of the homes that sold for $1 million or more last quarter were purchased with cash, while nearly 43 percent of multi-million-dollar sales were bought with cash.
  • The average size of a $1 million-plus home sold last quarter was 2,739 square feet, down from a 10-year average of 3,064 square feet. For resale detached houses the average was 2,825 square feet, while for resale condos it was 2,053.
  • On average, $1 million-plus homes sold last quarter had four bedrooms and three bathrooms.
  • The average lot size for a $1 million-plus home sold last quarter was 17,368 square feet, down from a 10-year average of 19,370 square feet (for homes on 5 acres or less).
  • The five zip codes with the highest number of million-dollar-plus home sales last quarter were 92620 (Irvine); 92130 (San Diego, including Carmel Valley); 95125 (San Jose); 92037 (La Jolla, San Diego); and 92651 (Laguna Beach).

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Yen Cross's picture

  Boo Yahh---

 Sincerely ,

 Jimminy Cramer.

 No houses are selling in my hood. Avg starting price just under $2m.

AltRight Girl's picture

That shows you socialism works...for the rich at least. All others let them have cake.

Viva Commiefornia ! Viva la Revolucion ! 

Soon to a Democrat state close to you.

Handout Nation: Combined Enrollment in America’s 4 Largest Safety Net Programs Hits a Record High of 236 Million

J S Bach's picture

I hear Marie Antoinette's palace was at an all-time high price before the plebs stormed the Bastille, too.

Of course, those who instigated the uprising against the throne in her day are now the ones who flaunt their power over US (neo-plebs).  Ah, how the wheels of history and fortune turn.  A great day of reckoning is fast approaching.  To all of those self-chosen elitists on the Coasts who look upon we "fly-overs" with disdain... tick-tock. tick-tock. tick-tock.  ;)

Yen Cross's picture

 Don't waste your time. She's /It's flagged as spam.

Anon2017's picture

But the owners of the web site do NOTHING to stop the spamming.

The BigPram's picture

you can add an extra 1200/USD a week to your income just working on the internet a few hours each day, check out this page...

SafelyGraze's picture

when every home costs a million buck, then "home sales" means "million dollar home sales"


Yen Cross's picture

  Should I wear this comment as a " Badge of Honor"? 

 Can you tell me the Delta on eur/usd call options one month out?  Can you show me the Gamma on the reversal[puts]

 Trader tips. Futures markets won't help you.

 Women are equally EVIL...  I suspect you're an old Nork lady knitting on an old CRT monitor.

peddling-fiction's picture

You have been green screened on Lynx.

GUS100CORRINA's picture

California Million-Dollar Home Sales Hit An All Time High

My response: Based on sales levels and price, one would think that people have found nirvana. Yes indeed, SEX, DRUGS and ROCK'n ROLL are alive and well.

Yen Cross's picture

     Nirvana sums it up..

Xena fobe's picture

Every single one of these sales is to Chinese.  All of them cash sales.

Dave Whiteman's picture

Paid with Zimbabwe dollahs. . .

Curiously_Crazy's picture

Sydneys average is over 1.1 million buck  - so are other places in this rediculous bubble filled world, yet in all of California it's ony 20 odd thousand in the entire state hat hit that price? Meh.

Anon2017's picture

Most homes don't turn over every year. Long time California home owners living in nice neighborhoods would face stiff capital gains taxes on the sale of their homes, even with the $250m/$500M exclusion. People who don't move also benefit from California's 1978 Proposition 13 (Jarvis/Gann Initiative).   

Pausebreak's picture

San Antonio upper tier housing is exploding.  Record house sales for homes over $1 million.  This time it isn't the Mexicans buying but the Mexifornians.

Endgame Napoleon's picture

It night be tech people. Supposedly, Texas has a tech boom.

Normalcy Bias's picture

The Tax Assessors in California must be sporting more wood than 84 Lumber.

nightshiftsucks's picture

I live in the SF East Bay burbs and now houses around me that are 2k sqf are now going for a million,ridiculous.

Chauncey Gardener's picture

I looked up my old condo in Pleasant Hill--last time on the block, $600K, 2 bedrooms, small galley kitchen, 1-1/2 baths. My house in Vallejo, 1500 sq. ft. built in 1988, also for sale at $600k. Beyond absurd. 

Blankfuck's picture

The FED FUCKERS print it, the little and big guys gives it to the internet brat pack, so they masterbate each in the game of who pays the highest gets the greatist ego. Prices should continue when the FED Preserve fuckers turns off the ponzi faucett

Singelguy's picture

Sounds like the perfect time for California conservatives to sell, pack up, and get the hell out of the state.

moorewasthebestbond's picture

I appreciate the sentiment, but most "conservatives" are really just flag-waving, tax-paying fans of big-government and the police state.


Finding a real conservative is like finding a needle in a field a haystacks.

Singelguy's picture

Ok, I guess they all left already! No wonder California is such a mess.

cesarsp_us's picture

It would be nice but not going to happen

sudzee's picture

FED has a printing press for free money, peons have real estate. No need to work if your house rises 200k per year.

Cluster_Frak's picture

those selling, are they getting da fuck out of state or sticking around for moar socialism and taxes?

Gen. Ripper's picture

I'll be GTFO when the general's youngest grads from hs

cesarsp_us's picture

Let it rain suckas I have a house in Cali

mickrussom's picture

question: what are your kids going to do? and news-flash, our economy is consumer based, if everyone is living paycheck to paycheck servicing mortgages and rents, how the heck can the economy grow anymore?



Khan Bodin's picture

Calipornia is a disgusting, filthy cesspool of liberal vermin and its place is under the sea where the liberal rats can be drowned and thus the spread of liberal plague finally stopped!

cesarsp_us's picture

I dunno then why is Cali the richest state in AmeriKKKa and why so many people want to live here?

Khan Bodin's picture

Because the oligarchy wishes it to be so libtardo. Calipornia wouldn't have loads of multinational companies when those companies can find thousands cheaper places if oligarchy didn't put it there with the purpose to captivate unsuspecting morons like yourself who would then find the observed liberal behavior there charming and wanted to replicate it, thus corrupting the imbeciles. 

cesarsp_us's picture

Oligarchy or not Cali is still the best state in this AmeriKKKa.

Khan Bodin's picture

The oligarchy controls corporate fascist enterprises as well as the printers of currency, libtardo. Also government since Murica is of fascist socio-political structure (fascism is the merger of state and corporate enterprisese if you didn't know). They can make a place rich or impoverished. You allowed them to do so. Hopefully they won't for long. With gold and silver as the money, such manipulations cannot exist.

Bernie Madolf's picture

How about a $1mm condo instead

700sqft apts are listing for $500m+

But then rents are $2m/mo

Let's see, $100m salary 30% effective rate; take home $70m before Ira jizz, that's only 34% of ones $100m salary to live in a 1bd apt

Seems sustainable as long as everyone makes $100m+

Oh wait...

Khan Bodin's picture

Calipornia and Atlantis are like Sodom and Gomorrah. You know what happened in those liberal places, how liberal rats, the spreaders of plague, ended there?

Chauncey Gardener's picture

It would be nice if these home listings sold and the owners took the cash and fled the state where $1M buys you something worth a million. Fruits, nuts, and flakes. That's California.

zebrasquid's picture

4 out of 5 people in San Diego came here from somewhere else, so stereotypes don't compute. If you spent time here, instead of just grabbing these cliches out of your butt, you'd know how stupid you sound.

monad's picture

Jerry Brown did it

TheAnswerIs42's picture

I've got in laws in San Jose who have sold property for over $1.3M which anywhere else on the planet would go for $300K.

Their only reason for moving (within the same tax authority) is that they don't get dinged for the appreciation.

And they wonder why CA is bankrupt?



Rich Monk's picture

Got news for you. $1 million does not buy much of a home in California.

bilbert's picture

Location, location, location - like many popular States, a million can buy a very nice house, OR a small mid-70's shit box.

"Oh, you want paved roads and City water??  Hmmmmmmm.............."

Truthseeker20's picture

I dont know why. California is becoming a socialist republic. Recently the legislature allowed communists to run for office. Next, they will take those homes so the downtrodden can live there.

Condition 1SQ's picture

Weather and scenery.  It's the only state with a Mediterranean climate along with ocean, mountains, forests and rivers.

zebrasquid's picture

We can live outside year round, unlike the huddled masses in most of the rest of the country, that might have 10 days a year as nice as the average day we have here in SoCal.

You only live once, you can't take it with you..etc.

Location, weather, lifestyle.

That's why you pay the premium.

Solosides's picture

And every single one of those houses is a true american "quality" molding tinderbox that will need major repairs in 10-15 years

Last of the Middle Class's picture

Evidently California is planning on being the redoubt for the techie billionaires when things turn to shit. Strategically, coming down out of the mountains and flushing the entire sewer and all it's rats into the see will be more and more promising I would think. But then again they never were really all that fucking smart.

truthalwayswinsout's picture

Those people will have to pay 1% in taxes every year for their new 40 year old shit shack that has 1400 sq ft. and many have less than a 1,000 sq. ft.

That is $10,000 minimum on a million dollar home. Let's just round it off and call it a $1,000 a month in taxes.