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California Million-Dollar Home Sales Highest Since 2007

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The number of Golden State homes sold for a million dollars or more rose last quarter to its highest level in almost five years, the result of an improving economy, some price increases and improved mortgage availability. The year-over-year gain for $1 million-plus sales was nearly double the increase for the overall housing market, a real estate information service reported.

A total of 7,763 homes sold for $1 million plus during the April-to-June period. That was up 79.5 percent from 4,325 during the first quarter, and up 18.5 percent from 6,553 in 2011’s second quarter, according to San Diego-based DataQuick.

The jump in million-dollar sales last quarter outpaced overall home sales. Total California home sales – including all price levels – increased 10.3 percent year-over-year last quarter, from 109,713 in second-quarter 2011 to 121,058 last quarter.

Last quarter’s $1 million-plus sales were the highest since third-quarter 2007, when 10,946 changed hands. The highest quarter in DataQuick’s records, which go back to 1988, was third-quarter 2005, when 15,898 homes sold for $1 million or more.

“This market always responds to its own set of incentives. Most homebuyers agonize about income, down payments and mortgage interest rates. And while there may be some of that in the prestige market, buyers there also watch what kind of returns their assets are bringing from investments and savings. If your money is parked in a savings account or something else that is low-risk, you’re not making much and real property might look good,” said John Walsh, DataQuick president.

“Part of the sales increase is because prices are going up, pushing some near-million-dollar homes up over the million-dollar threshold. Those price increases don’t appear to be dramatic, but they may also be pushing fence-sitters into the market,” he said.

Statewide, 188 homes sold for $5 million or more last quarter, while 122 were in the $4-$5 million range, 316 were in the $3-$4 million range, 909 were in the $2-$3 million range, 5,100 were in the $1-$2 million range. The exact price on the rest could not be determined, although financing and other factors made it clear that it was a million-dollar sale.

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