Many of the high-end markets in California have made great strides in 2010. Some markets that had been hit hard in 2007-2009 came back strongly in 2010 with solid gains in median and average selling prices. A recovery of expensive real estate is important because when the high-end markets do well, the lower-tier markets do well too - usually because of move-up buyers. So when the media decides to report on the health (or lack thereof) of the high-end markets I'm ready to jump in with facts!
BusinessWeek reporter Andrea Wong wrote an article entitled "In America's Richest Small Towns: Big sales Stall" about high-end real estate sales in expensive small towns around America. Local markets Los Altos Hills (where I frequently do business) and Woodside are always on lists like this. In the article the writer states that the price of homes dropped 13.6% in 2010. That's incorrect. The average selling price dropped less than 1% and the median dropped about 5%. Either way, the figures are wrong.
Assuming the writer was also including raw land, those values are even less in line with the article. Land prices rose 13% in Los Altos Hills (based on 3 closed sales) but the median dropped 18%. Those 3 sales (totaling over $5 million) have little impact on the average or median sales prices of property overall in Los Altos Hills so again, the article is wrong.
It's interesting that the article casts a pall over the entire high-end market by saying that 33 of the 50 towns on the list dropped. Los Altos Hills ranked #4 on the list which makes it one of the more important towns upon which to base the statistics. However, if one of most critical towns hasn't actually seen that much of a drop, it makes me wonder how far off the other figures are.
I myself have more than one client looking at homes priced $4-8 million and I know other agents who are writing offers with similar clients of their own. This segment of the market is not as bad as this article portrays and we'll see a lot of activity in 2011.