SAN DIEGO -- After three consecutive years as the most expensive neighborhood in America, La Jolla has fallen to No. 3 among 317 of the nation's housing markets, according to the 2006 Coldwell Banker Home Price Comparison Index (HPCI). The HPCI is an "apples to apples" comparison of similar 2,200-square-foot homes sold in typical, middle-management neighborhoods.
Moving into first place this year is Beverly Hills, where it will take at least $1.8 million to buy a house. Santa Monica is second at $1,766,666 and La Jolla third at $1,762,500.
Looking back at the HPCI over the last four years shows the dramatic change in the value of local residential real estate.
In 2003, the average home in La Jolla sold for $1,362,375. By 2004, the price had risen 25 percent, to $1,708,333 and it climbed an additional 10 percent in 2005, to $1,875,000. "While the average price in La Jolla declined 6 percent in 2006, this follows an unprecedented run-up in value," said Rick Hoffman, president and chief operating officer for Coldwell Banker Residential Brokerage San Diego/Inland Empire. "This year's average price remains nearly 30 percent above where it was in 2003."
Other San Diego neighborhoods included in the survey were Encinitas at No. 34 with an average price of $778,275; Rancho Bernardo, 41st at $685,000; and metropolitan San Diego, 45th at $642,250.
In California, Bakersfield was the least expensive market at $411,500, 3 percent below the national average sales price of $423,950. No California market was in the top 10.
Nine of the top 10 most expensive surveyed U.S. markets overall in 2006 were in California.
Following Beverly Hills, Santa Monica and La Jolla are Santa Barbara fourth at $1.7 million; Palo Alto, fifth at $1,652,042; Newport Beach, sixth at $1,556,250; San Jose, seventh at $1,410,662; San Mateo, ninth at $1,366,139; and San Francisco, 10th at $1,363,750.
Greenwich, Conn., is again the lone market in the top 10 not in California, ranking eighth with an HPCI average sales price of $1.4 million.
The 2006 Coldwell Banker HPCI evaluated home prices in a total of 384 markets, including, for the first time, 42 international markets outside of North America. The cumulative average sales price in the full national study of 317 U.S. markets (and one Puerto Rican market) surveyed is $423,950, a 6 percent increase over $401,767 from the same period in 2005. Over the past five years, values for homes of this size have increased by 57 percent over a 2001 price of $269,241.
Minot, N.D., returns as the most affordable market, at $132,333. Minot also ranked as the most affordable market in 2004, at $130,300. In 2005, Killeen, Texas, was the most affordable market.
The price difference between Beverly Hills and Minot is $1.67 million for a similar 2,200 square foot home. There is a $1.68 million difference between Milan, Italy, the most expensive international market at $1.81 million, and Minot.