Luxury home values increased 13.5 percent in San Diego in the first quarter of 2014 compared to a year ago, according to the First Republic Prestige Home Index by First Republic Bank, a private bank and wealth management company.
"Prices are being driven higher by limited inventory, robust demand for homes in California's more desirable communities and continued low mortgage interest rates,” said Katherine August-deWilde, president of First Republic Bank.
San Diego area values gained 0.8 percent from the fourth quarter of 2013. The average luxury home in San Diego is almost $1.93 million. The 13.5 percent increase year-over-year was also the third straight quarter of double-digit gains in the region.
"It was a pretty strong first quarter with a lot of multiple offers, but the number of sales was down," said Peggy Chodorow of Berkshire Hathaway HomeServices in La Jolla. "Going forward, I think it's going to be a more balanced buyer-seller market, which is healthy."
Market activity in Rancho Santa Fe was slower in the first quarter. "There are too few buyers for the inventory we have," said Chuck Gifford of Coldwell Banker in Rancho Santa Fe. "Rising prices and qualifying conditions are making it more difficult for buyers to find the right property."