Sales of million-dollar homes fall 22%
Bloomberg News Service
LOS ANGELES Sales of million-dollar homes fell 22 percent in California in the second quarter, as potential buyers' wealth declined with the stock market.
Statewide, 2,577 million-dollar homes were sold in the quarter, down from 3,293 in last year's second quarter, according to DataQuick Information Systems.
The drop is a reaction to a 52 percent decrease in the Nasdaq Composite Index in the past 12 months, said Linda May, a broker with Coldwell Banker Previews in Beverly Hills, Calif.
Hewlett-Packard Co. and Cisco Systems Inc., two of California's largest companies, have announced job cuts this year.
Potential buyers are "not as rich as they thought they were," May said. "The buyer is extremely discriminating. If he feels he can do better by waiting, he'll wait."
After a record 2000, when million-dollar home sales in California rose 51 percent to a record 11,364, the market was bound to return to a "normal" level, said DataQuick analyst John Karevoll.
"We're really watching this carefully," Karevoll said. "If this is the beginning of a trend, we need to call it and watch it. There's still the chance it's a temporary lull."
In San Francisco, 130 million-dollar homes were sold in the quarter, down 30 percent from last year. Declines were greater in the Silicon Valley counties of Santa Clara, where sales fell 49 percent and San Mateo, where they fell 38 percent. Million-dollar sales in Southern California fell less than 11 percent. In a reverse of last year, Southern California had more million-dollar sales than the Bay Area, at 1,354, compared with 1,063.
Prices haven't dropped, but some homes that would have been priced at $1 million or more in the past aren't priced that high this year, Karevoll and May said.