San Francisco’s luxury home values dropped in the first quarter to their lowest point since the first quarter of 2004

San Francisco’s luxury home values dropped in the first quarter to their lowest point since the first quarter of 2004, when the region was clawing its way back from the dot-com bust.
San Francisco Bay Area luxury home values lost 4.3 percent from the fourth quarter of 2010 and were down 1.9 percent from the first quarter of 2010, according to a quarterly survey produced by San Francisco-based First Republic Bank. (NYSE: FRC)
“Prices fell as sales activity declined,” said Katherine August-deWilde, president and chief operating officer at First Republic.
Luxury home values also fell in Los Angeles and San Diego.
In Los Angeles, they dipped 0.5 percent from the fourth quarter and were down 0.9 percent from last year’s first quarter.
In San Diego, luxury home values plunged 4.6 percent from the fourth quarter and 5.1 percent from last year’s first quarter.
The First Republic Prestige Home Index is produced quarterly with Fiserv CSW, (NASDAQ: FISV) a provider of property valuation services and home-price data to the nation’s financial institutions. The survey defines luxury homes as those valued at more than $1 million, which typically feature three to six bedrooms and a comparable number of bathrooms in 3,000 to 6,000 square feet.
“First quarter sales reflected the price discounting that took place in the second half of 2010. We had a buyer’s market in the final two quarters of last year,” said Stephen Gomez of Gomez & Patton Real Estate in San Francisco. “Now we’re starting to see the window to the buyer’s market close.”
One factor fueling buyer interest is the flood of capital pouring into the region’s tech sector, generating buying power for those looking to purchase on the Peninsula.
“I see tons of buyers with money, but inventory is the issue,” said Geoffrey Nelson of McGuire Real Estate in Burlingame.
Buyer hesitation was on full display in the East Bay.
“There are actually a few buyers out there, but they are unwilling to commit,” said Sharon Dare of J. Rockliff Realtors in Danville.