Luxury home values increased in San Diego in the fourth quarter of 2013 compared to a year ago, according to the First Republic Prestige Home Index by First Republic Bank.
San Diego area values gained 16.6 percent in the fourth quarter year-over-year and 1.3 percent from the third quarter of 2013. The average luxury home in San Diego is almost $1.9 million.
The 16.6 percent increase year-over-year was also the second straight quarter of double-digit gains in the region.
"In Rancho Santa Fe, we're seeing multiple offers and offers over the asking for properly priced homes up to $3 million," said Linda Sansone, of Willis Allen in Rancho Santa Fe. "From $3 million to $5 million, the market is solid, prices are appreciating and supply is tight. For homes $5 million and above, there is plenty of supply, and prices are rising modestly."
Sue De Legge of Sue De Legge & Associates in Rancho Santa Fe said home price appreciation was driving the market.
"Rising prices are motivating more sellers to list their homes," she said. "We expect more inventory to be brought to market in coming months."
San Francisco Bay Area values climbed 12.4 percent from the fourth quarter of 2012, and 1.8 percent from the third quarter of 2013. The average luxury home in San Francisco is $3.1 million.
Los Angeles area values rose 13.7 percent from the fourth quarter a year ago and 1.3 percent from the third quarter of 2013. The average luxury home in Los Angeles is $2.3 million.
"Luxury home prices again posted double-digit gains on a year-over-year basis in San Francisco, Los Angeles and San Diego," said Katherine August-deWilde, president and chief operating officer of First Republic Bank (NYSE: FRC). "Market conditions in California's luxury communities continue to be very strong. Limited inventory, robust demand and low-interest rates are driving prices higher."