The million-dollar home became something of a rare bird in California last year, a victim of the continuing collapse in the housing market.
California saw a 42.5 percent drop in home sales at $1 million or above last year, according to a report this week by market researcher MDA DataQuick.
A total of 24,436 homes sold in California last year for $1 million or more, DataQuick said. That was the lowest since 2003.
Luxury sales sputtered even as the low end of the market, nursing on cheap foreclosed properties, showed signs of life. The high end was battered by the downward price pressure at all levels of the market and was hit by a severe shortage of financing, said DataQuick analyst Andrew LePage.
Those buyers are locked out of most mortgage assistance programs like Fannie Mae. As a result, they are charged higher interest rates and often have to make down payments of 30 percent or more, LePage said.
"Anything for the upper-end market, there's no financing," said Scott Johnson of Pipeline Capital Group, a mortgage broker in Granite Bay, Calif. "You're effectively looking for a cash buyer."
Even homes with celebrity cachet are being affected. A Granite Bay home listed by actor Eddie Murphy in 2005 for $10 million finally sold in late 2007 for $6.1 million, said listing agent Nick Sadek.
In some cases, sales are stalling out because of a high-stakes game of chicken. Sellers at the multimillion-dollar level often aren't in a hurry, and buyers are showing steely discipline.
"People are still calling, inquiring, but you have to drag them to the bargaining table," said Sadek, who runs Granite Bay brokerage NRS Luxury Estates. "Everybody's looking for a steal -- they're not just looking for a good deal."
A similar dynamic is at work in the rarefied air of Lake Tahoe, on the California-Nevada border, where million-dollar homes are common and sellers are sitting tight rather than surrender to cheap pricing.
Median prices around the lake fell only 17 percent last year, to $697,793, according to figures compiled by Zephyr Cove, Nev., broker Chase International. The figures cover California and Nevada.
That's a modest decline compared with markets like Sacramento County, where DataQuick said prices fell 37 percent last year.
"Let's face it, the wealthy are still pretty wealthy. ... Most of them can wait it out," said Sue Lowe, corporate vice president at Chase.
Tahoe has hardly been immune to the downturn, though. Despite a good fourth quarter, sales volumes for 2008 fell 16 percent last year, Chase said. Tahoe tends to feed off Sacramento and Bay Area residents buying second or third homes, and the economy has gotten increasingly weak in both of those regions.
"We're feeling the same pain that everybody is," Lowe said.
(E-mail Dale Kasler at dkasler(at)sacbee.com)
(Distributed by Scripps Howard News Service, www.scrippsnews.com.)
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