Monday, June 23, 2014

Danville Luxury Homes Clawing Their Way Back

Danville Area Real Estate: Luxury Home Market Clawing Its Way Back

The road to a full recovery has been a slow one for Luxury Homes.  For the purpose of this review as  This definition has been overlain on the geographies including Alamo, Blackhawk, Danville and Diablo, basically what in my personal view comprises the Danville Area.
with my last, I have defined Luxury Homes to include homes that are 5000 square feet and larger sitting on a premium lot that is between ½ and 1 full acre, equipped with a pool.

The Luxury Home Market bottomed in 2010 both in terms of average price and dollars paid per square feet.  At that time you could have bought a 5,800 square ft. home for an average price of about $1.9 million with a value of $327 per square foot.  Those prices were nearly 30% below the current market for a Luxury Home and 14 lucky bargain hunters snagged one.

During the Luxury Home Market peak in 2007, only 14 homes sold, but they did so with an impressive average price of $2,920,833 and an average square foot price of $506.  I’m frequently asked, “Are we in a bubble?”  I don’t think so.  In order to match the 2007 peak, Luxury Home prices will need to rise another 20% and at the current rate of growth we have some way to go before we even get close.

Although the line of ascent since 2010 has not been perfectly straight, it has for the most part been steady and I believe it is gaining strength.  Sales are happening faster. Days on market stand at 42 and are 25% less than 2013 and roughly a third of where they were 2012 at 154. Currently, through June 20, 2014, a total of 7 Luxury homes have sold.  The prices are roughly the same as they were for the entire year in 2013, suggesting no great improvement over last year.

Encouraging, however, is there are 3 homes pending sale, hinting that this year will have more Luxury Home sales than last year.  The Luxury homes that are pending sale are carrying a list price of $3,055,000 and an average square foot price of $463.  If those prices hold, it is likely that 2014 prices will eclipse 2013 prices. 

It should be of interest to anyone who follows the market that 15 Luxury homes are currently for sale and they are carrying an average list price of $3,610,905 and a square foot price of $556.  That is very aggressive pricing compared to the current market. If these homes were to close at list price, their average price would exceed the 2007 peak by 24%.  That, I believe would be unlikely and I think would definitely indicate a bubble.  I just don’t think we are there yet.

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Wednesday, February 26, 2014

Danville Area Real Estate: Great Start in 2014  

The Combs Team Joe Combs Nancy Combs Danville Real Estate
The Combs Team Real Estate Services for The Danville Area
 Although the early season in Real Estate is not a great predictor for the entire year, I thought I would look at the first 2 months of 2014 and see if there is anything useful to be gained by an analysis of this same time period last year.  I’ve used red and green in the chart to indicate the direction of change, green for the positive and red for the negative.  Days on market must be interpreted in the opposite as a negative change in days on market means market time is decreasing which is a good thing.
 The vast majority of indicators on the chart are green which portends well for another really good year for
Danville Area Real Estate.  An exception is in Alamo where the number of homes sold declined a bit, the prices are off a tad and dollars paid per square foot declined for the first time in a long while.  Is this reason for concern?  It’s probably not.  It’s just a small hint market prices in Alamo are unlikely to continue growing as fast as we have seen them during the past 3 years.
 A significant issue in Alamo is lack of inventory of homes for sale.  At this time only 44 homes are active listings and this is less than half of what should be normal.  Given this fact and insatiable demand for really nice homes, I look for great homes to continue to bid up in spite of the data presented here.  This does have the potential to move the price needle much higher by year’s end.  That would be unexpected, but still possible and most delightful since I live in Alamo.
 Blackhawk which has been lagging the rest of the market has taken a giant leap forward in the first two months of the year compared with last year.   The average sold price moved from $1,037,625 up to an amazing. $1,678,800 for a 62% increase in sold price.  The size of homes sold increased by only 32%, so we are forced to acknowledge that nearly half the gain is real price appreciation.  There are only 22 homes for sale in Blackhawk at this time, not very many.
 Last month I mentioned Danville was fast approaching Alamo on the basis of price paid per square foot with the possibility of overtaking.  With Danville sitting at $396 per square foot and Alamo at $386 for we can see that this has actually come to pass at least momentarily.  It will be interesting to see how these two areas compare at the end of the year.
 Diablo continues to gain momentum.  Sixteen homes sold compared to three this time in 2013.  Purchase price advanced from $1,877,083 to $2,021,402 up about 8% over last year and dollars paid per square foot advanced nicely as well.   Eight homes are currently for sale in Diablo and the lowest priced listing stands at just under $3.3 million.  This is one third more than the average price paid in Diablo so far this year.  What happens moving forward will be interesting indeed.
 I think the most notable information for the Danville Area Market contained here is the activity in Diablo and Blackhawk demonstrating an accelerating recovery for high end luxury homes.  A healthy Luxury Home Market is vital to the completion of a total market recovery in our area as it is a strong signal that buyers and banks believe Real Estate to be a sound investment.  I would like to think as confidence grows, we can expect to see high end home sale numbers increase.

The Combs Team
The Combs Team
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Joe and Nancy Combs, The Combs Team, have a high degree of focus on Danville Real Estate and Alamo Real Estate and sell Real Estate throughout the East Bay. As always, if you have any questions about the Alamo and Danville California real estate markets, or finding that perfect home for sale in the East Bay, please let The Combs Team know! Call Joe Combs 925-989-6086 or Nancy Combs 925-351-6999.

copyright joe combs 2014 all rights reserved. A link to this article or any appearing on The Combs Team website may be shared freely without permission from the author.  Alamo Real Estate, Danville Real Estate Joe Combs Nancy Combs thecombsteam  combsteam Danville Real Estate Services Alamo Real Estate Services Realtor, Homes for Sale in Danville, Homes for Sale in Alamo

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Wednesday, February 5, 2014

Danville Real Estate: Area Home Prices Have Recovered 

The Danville Real Estate market has shown dramatic improvement of late.  So much that I thought it would be good to take a look at the last 6 months of data and review our local market which includes Alamo, Danville, Diablo and Blackhawk.  During this time period homes have been selling at a rate of about 32 homes per month through January 27th.  Only 7% of sales are distressed sales, either bank owned or short sales and these special sales are becoming a much smaller drag on our market.

 Non-Distressed, desirable homes continue to sell fast.   The Town of Danville leads the way with a mere 28 days on market followed by Blackhawk with 49 and Alamo with 60.  Diablo has performed significantly worse on this measure at 188 days on market, but when you consider the prices paid for the Diablo homes the time difference can’t be considered bad.

 Of note is that the average size of homes sold in each of the areas has increased significantly since the market bottom in 2011.  The average for Alamo is up nearly 500 sq. ft. since then.  This is an indication that larger homes are now selling routinely.  Also important to note is with an average price of $1,461,294 Alamo home sales have surpassed their 2005 level.  With only 2 distressed sales in the past 6 months, I think an argument can be made that Alamo Real Estate has recovered.   Click Here To Read More and See the Chart.