I left my heart in San Francisco

This article is reprinted from Wine Country Real Estate, a special advertising section of The Press Democrat.

Tony Bennett's timelessly beautiful song about one of the world's greatest places rings through the hearts of many couples this time of year. Written by George Cory, Jr. and Douglas Cross in 1954, Bennett first performed it in 1962 at the Fairmont Hotel on Nob Hill in San Francisco. To this day it is his signature song. Similarly, buyers across the globe pursue their dreams of acquiring their signature property - a 'legacy' or 'trophy' purchase - that they feel captures their hearts and essence as they see it. Having the benefit of living in one of the globes most desired regions, the Northbay markets are no stranger to these occurrences.

As global borders dissipate, purchases of multimillion dollar estates are growing. Buyers no longer feel restricted to making purchases within their own countries. They have become compelled, even with language and cultural barriers, to acquire real estate in treasured markets around the world. The most stable of countries are seeing the benefits of this by attracting the most interest in fixed asset purchases – real estate. Affluent buyers are purchasing prestigious estates, ranches and luxury homes – properties valued in excess of $3 million - for investment, primary and even secondary residences.

Sonoma County has historically seen very few single-family home transactions at this price point, averaging 1.5 per month since the turn of the modern century. Although, according to BAREIS MLS data, during the course of 2014 this average has climbed to 3.25 homes per month – a 117 percent spike.

In 2014, Sonoma County recorded sales of 39 homes priced in excess of $3 million – that's 30 percent more than the prior year. As December ended there were 31 homes available in this niche' of the market leaving the absorption rate at seven percent thereby indicating a market still in favor of buyers. Keep in mind, with generally small amounts of data, it is important to note the absorption rate fluctuated between 3-17 percent during the course of the year - A stark contrast to the sub-million dollar market which closed the year at its' peak absorption rate of 105 percent – clearly favoring sellers.

The absorption rate is calculated by dividing the total number of homes sold in a month by the total number of homes available for sale at the end of the same month. A high absorption rate – 20 percent and above – indicates that the supply of available homes will shrink rapidly, thereby increasing the odds that an owner will sell a property in a shorter period of time. Conversely, an absorption rate below 15 percent is indicative of a buyer's market, meaning homes are selling more slowly.

High-end buyers typically pay a greater price per square foot than those in any other market segment. These prized properties tend to feature amenities like pools with waterfalls, large yards or acreage, theatre rooms, multiple garages, guest homes, sweeping views, plus more desirable and expensive interior finishes while being in the most preferred locales.

In Sonoma County, super-luxury buyers spent an average of $874 per square foot (/sf) in December, compared with $302/sf countywide for homes under $1 million - a whopping 189 percent premium to break into to the market's most exclusive segment.

With Marin's geographic advantages, affluent population and historically slow growth in new housing construction the luxury markets typically showcase an extraordinary cost difference to acquire these posh properties when compared to the sub-million dollar market niche'.

Over the course of 2014, eager well-heeled buyers completed purchases on 173 estates valued in excess of $3 million – 89 percent greater than just the year before. Marin closed out December with 51 luxurious estates available to buyers that still seem to hold the upper hand in this segment as indicated by the current 14 percent absorption rate. Contrastly, homes priced under $1 million in Marin closed the year with a very seller friendly absorption rate of 105 percent. As December concluded, Marin's most wealthy buyers were dishing out $1,141/sf - that's a staggering 187 percent more than buyer's countywide paying $398/sf for the average home under a million dollars.

In Napa County, affluent buyers acquired 29 prominent properties during the course of 2014 – 71 percent above the quantity sold in 2013. Napa closed out December with 39 stately properties on the open market as the absorption rate settled down to three percent – putting buyers back in the driver seat in the upper tier market. Napa homes priced under $1 million had a decidedly different year as seller's reigned supreme – clearly indicated by a 42 percent absorption rate. Napa buyers paid $703/sf in December to acquire premium real estate – 50 percent more than the $468/sf average being paid in the sub-million dollar market.

Do you have a legacy you want to leave? Maybe you will find it here in the rolling valleys of the Northbay. After all, Tony summed it up best when he crooned, 'high on a hill, it calls to me'.