The Prestige Home Index, compiled by San Francisco-based First Republic Bank, has tracked the average price of "luxury homes" for nearly 30 years, since 1985. Currently, the index defines a luxury home as one priced over $1 million, but of course that is now just the median price of a San Francisco property. The latest index shows the average price of a Bay Area luxury home to now be $3.323 million, which is a new record for the area. Average luxury prices surpassed the $3 million mark back in 2007 and 2008, but then plummeted below $2.5 million. They have been back above $3 million since September of last year.
Back when the index started nearly three decades ago, a luxury home's average price was only $578,548. Luxury homes in the Bay Area have more than quintupled in value since then, with big surges occurring in the late 1990s and mid-2000s. The latest rise has seen values increase 12.2 percent from the same time last year and 4.6 percent from the first quarter of 2014, which was also a record breaker. And although the values are high, the homes themselves often feel more like normal upper-middle class places than out-and-out palaces. As the Business Times points out, the homes included the index often are between 3,000 and 6,000 square feet and have three to six bedrooms.
· Bay Area Home Values [First Republic]
· No Surprise: SF's Housing Marking Was Bonkers This Spring [Curbed SF]
· San Francisco Luxury Homes Hit Record Average Price of $3.3 Million [SF Business Times]