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The average price of a luxury home in Los Angeles County rose 7.1 percent in the first quarter of this year, compared to the first three months of last year, according to a study released today.
The cost was also up 1.9 percent over the previous quarter, which covered the final three months of 2012, according to the First Republic Prestige Home Index by First Republic Bank.
The average cost of a luxury home in the Los Angeles area in the first quarter of this year was $2.1 million, the highest in nearly four years, according to the index. That compares to $1.7 million in San Diego and $2.8 million in San Francisco.
“Limited inventory exists in many areas, and buyer demand is accelerating for properties in the most desirable neighborhoods,” said Katherine August-deWilde, the bank’s president and chief operating officer. “Many homes have received multiple offers and are selling over the asking prices.”
“The market was driven by real confidence in the economy, foreign buyers and wealthy people who no longer want to hold off buying homes,” Rose said. “Pent-up demand and a lack of inventory resulted in true competition in the market.”
“Last year, people who wanted to buy thought there was going to be more inventory, but that hasn’t materialized,” she said. “People are realizing that it is time to get into the market. The economy and optimism are definitely on the upswing.”
In Los Angeles County, the index tracks sales of luxury homes in Arcadia, Beverly Hills, Calabasas, La Canada Flintridge, Encino, Los Angeles, Malibu, Marina del Rey, North Hollywood, Pacific Palisades, Pasadena, Playa del Rey, Santa Monica, Studio City, and the West Los Angeles enclaves of Bel Air, Brentwood and Westwood.
First Republic Bank produces the Prestige Home Index each quarter with Fiserv CSW Inc., which provides automated property valuation services and home price metrics to U.S. financial institutions