Prices for luxury homes in Orange County and elsewhere in California continue to hold up better than the broader market, according to a new study and anecdotal evidence from real estate brokers.

The First Republic Prestige Home Index showed prices for homes valued at $1 million or more fell 3.7 percent in the Los Angeles area in the first quarter of 2008, compared to a year earlier. That compares with a 20.5 percent drop for the median home price in Orange County in April compared with a year earlier, according to DataQuick.

In Orange County, prices for inland luxury properties have fallen, while homes in beach communities have retained their value, said First Republic Bank, which publishes the Prestige Home Index.

While the luxury market isn’t immune to the fluctuations that beset lower-priced homes, it hasn’t been affected to the same degree by the downturn of the past year, said broker Victoria Lee of HOM Group in Newport Beach. People who own homes in the coastal luxury market, which some brokers say starts at about $4 million and goes up from there, typically aren’t in a position where they need to sell for whatever they can get. If they can’t get a price close to what they want, “they simply won’t sell their house and they won’t take the loss,” Lee said.

Also, demand for unique luxury properties along the coast remains strong among people who can afford them, she said. These people typically don’t worry about interest rates and have financing options – such as private banks or investments they can sell – that aren’t available to most of us. “It’s where people for the most part, where they would love to be,” Lee said. “Once they’ve reached a certain level and that’s where they want to be, they’re going to figure out a way to do it.”

This entry was posted on Tuesday, May 20th, 2008 at 12:04 pm and is filed under Local-Local, Luxury homes. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.