The West Coast Dream Revival That is Driving Prices in Southern California

PacificSIRCoronadoPacific Sotheby’s REALTOR® Eric Iantorno had the pleasure of escorting The Times UK reporter Leah Milner on a tour of homes throughout San Diego county on her recent visit to California. Milner, a reporter for The Times UK was researching the California real estate market for an article on home prices in the States. According to Iantorno, “It was a great opportunity for us to showcase the diverse areas and properties that San Diego county offers. With so many new homebuyers and investors coming from overseas, San Diego is truly a player in the global market.”

Following is the complete article written by Leah Milner and published in The Times UK today.

The West Coast dream revival that is driving prices in southern California

Almost 160 years after the end of the California gold rush, it is boom time again in the Golden State, with property prices in the south at their highest level in five years.

Upmarket destinations in San Diego County, such as La Jolla, Del Mar, Rancho Santa Fe, Encinitas and Coronado are proving a particular magnet for America’s elite, with Microsoft founder Bill Gates and former presidential candidate Mitt Romney among local property owners. The annual Comic-Con comic book convention is currently under way, a major draw for celebrities including Cameron Diaz, who was born in San Diego.

Buyers are lured by spacious homes with stunning coastal views, guaranteed sunshine and the option to switch from surfboard to skis within a weekend, but it is not cheap, particularly for British buyers hit by sterling’s fall against the dollar.

Land near the coast that was once owned by flower growers has become too valuable to cover with greenhouses, and many family businesses are selling up and moving their farms further inland to make way for prime real estate.

Prices in San Diego County were up by 21 per cent over the year to May, when the median property value was $406,500 (£269,640), according to DataQuick, the research consultancy. Low mortgage rates and a lack of properties for sale have pushed up prices, but they remain below the 2005 peak of $517,500 (£343,250).

Eric Iantorno of Pacific Sotheby’s International Realty still believes that the luxury end of the market offers value in terms of space, scenery and lifestyle. The area is also attracting foreign interest: Iantorno says 35 per cent of his business comes from overseas. It is popular with buyers from Canada, Mexico, China, Russia and Britain.

Encinitas, just north of San Diego city, is one destination that is grabbing the attention of wealthy buyers. Residents seem to be in permanent holiday mode as they breeze along the high street in flip-flops and comfy-chic Lululemon yoga trousers, sipping “dirty chai lattes” (chai with a shot of espresso). “One of my clients had a vast collection of Chanel handbags, which she sold when she moved here,” Iantorno says. Yoga seems to dominate here, largely because it is home to the Encinitas Hermitage, Retreat & Gardens spiritual centre, which played host to the Beatle George Harrison and sitarist Ravi Shankar.

You can buy a Mediterranean-style ocean-front villa with a sun terrace overlooking the beach for $6.9 million (£4.58 million). The four-bedroom, three-bathroom 4,400 sq ft property also has a courtyard to escape the sun or, on cooler evenings, to socialise around the wood-burner. It has an airy kitchen with doors on to the terrace that you can open wide to let in the sea air. Some of the bathrooms and bedrooms also look out on crashing waves.

For $2.65 million (£1.76 million) you could get a modern home on Sheridan Road, set back from the ocean, with six bedrooms, five bathrooms (including a guest house) and a 50ft swimming pool.

Other big-budget buyers flock to La Jolla, which has less of a new-age feel than Encinitas. The high street is lined with fashion boutiques, jewellery stores, restaurants and high-end hotels, and the coastline is a mix of rocky stretches, where sea lions slumber, and sandy beaches.

For $10.5 million to $12.5 million (£6.96 million to £8.29 million) you could buy the five-bedroom, seven-bathroom Via Casa Alta, on a hill above La Jolla. It is a contemporary home with plenty of glass to make the most of the views, and a pool, hot tub and staff quarters.

Four miles inland, nestled amid groves of eucalyptus, is Rancho Santa Fe, a haven for horsey types and golfers. With a median property price of $1.59 million (£1.06 million) it is one of America’s richest zip codes, and offers 40 miles of equestrian trails as well as the 18-hole Rancho Santa Fe golf club. Bing Crosby launched a golf tournament here in 1937, as well as setting up the horse-racing track in nearby Del Mar with some of his Hollywood friends.

Facebook boosts values

Five hundred miles north of San Diego, the San Francisco property market is feeling the “Facebook effect”. The social network’s $104 billion flotation last year is thought to have created a thousand millionaires and Rob Levy, of Sotheby’s International Realty’s San Francisco branch, believes dot-com successes have boosted sentiment among buyers. A recent study ranked San Francisco as the happiest city in America and seventh happiest in the world, and perhaps this upbeat outlook is supporting the housing market recovery, as median prices in the city have gone up 24 per cent over the past year to $870,000 (£572,077), according to DataQuick.

Many a neighbourhood is flatteringly described by estate agents as “in transition”. This usually means construction work on every other corner, yet the atmosphere of an area can quickly change from one block to the next. Hipster hang-outs such as Mission and SoMa are similar to parts of East London that have yet to lose their rough edges completely. This does not deter the tech winners from seeking out luxury warehouse apartments and high-rise penthouses here.

If you are looking for architecture evocative of San Francisco, Haight-Ashbury is where you’ll find the colourful Victorian and Edwardian terraces known as the “ painted ladies”. The city has no shortage of properties with stunning views, thanks to its undulating terrain. Nob Hill, Russian Hill and Pacific Heights are popular with buyers for this reason. In the latter, you can buy an environmentally sensitive four-bedroom, seven-bathroom home for $23 million (£15.1 million). Its sky-lit loft level opens on to a roof terrace looking out over San Francisco Bay and the Golden Gate Bridge. There is a swimming pool, steam and sauna rooms, and a guest floor with its own sitting room.

Buyers beware

Watch out if you’re buying in California — the state levies an annual tax on all properties of 1 per cent of the market value, which could be a substantial sum.

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