This data will generally look at Bay Area home markets of $5M+, or, depending on the analysis, at large homes of 4000+ square feet. Generally speaking, luxury home sales have cooled significantly in recent months with the headwinds of various macroeconomic factors – soaring inflation and interest rates, volatile financial markets, declining consumer confidence, and so on – impacting buyer demand. The luxury market is typically most affected by financial markets (and the general market, by interest rates), which continue to see dramatic stock price fluctuations, and recently, for the time being, a substantial recovery. Market changes are very much a work in progress as supply and demand adjust to changing economic circumstances and the confidence or doubt they engender: Buyer and seller psychology play an enormous role in housing markets.
Trends vary, but within the inner Bay Area, activity in the luxury market typically climbs through spring, slows in summer, spikes back up in fall (sometimes dramatically), and then plunges for the mid-winter holidays in mid-November. Counties with large second-home markets, such as Napa and Sonoma, sometimes see activity climb to peak in summer with a gradual decline thereafter.
What constitutes a “luxury” home or estate is, of course, a matter of opinion, and factoring in the large differences in values by location, will vary widely across the Bay Area. What one gets for however many millions of dollars in any specific city, town or neighborhood varies enormously: In home and lot size (acreage/vineyards); architecture and condition; home technology; views; privacy; decks, pools, tennis courts and landscaping; wine cellars, media rooms, security and 3+ car garages; access to open space, beaches, golf courses, good schools and shopping; and many other circumstances and amenities. In some locations $5 million will purchase a huge, immaculate mansion on a 10-acre estate; in others, a “fixer-upper” on a small lot. In some Bay Area counties, the threshold for “luxury” home prices could easily be set at $3,000,000, or lower. In real estate, and especially in a market segment full of very special, luxury homes, the devil is always in the details. See our monthly market updates to stay up to date.
