Values Continue Crash in Crystal Cove - Buyers Remorse Part II

In an earlier post I wrote about the decision of a recent buyer of 18 Rockshore Bluff to pay $4.4 million. The value of this home was questionable, I thought. If it is that obvious, I wonder what kind of advice the buyer's agent gave to the buyer who was forking over $4.4 million.

Well, hold on to your hats. And hold on to your loan docs, Bank of America, for the $3 million mortgage that you wrote on 18 Rockshore. It is worth much less now, only months later.

2 Rockshore Bluff recently sold. For about $2.6 million. Practically identical house. Same 3800 square feet. Same killer view. The photo is from 2 Rockshore.

Let me get out my calculator. $4.4 - $2.6 = $1.8 million dollar loss in less than six months.
The B of A loan on 18 Rockshore? Already underwater. The buyer? Underwater. The agents involved? My guess is that they are laughing all the way to the bank.

Crystal Cove home values are going down big time. And there are many overpriced listings. Do the due diligence and research. Be careful out there.....

Coldwell Banker's MLS Listed Cartoon House Foreclosed Upon

I've written about the 940 Hillcrest cartoon house for a while now - how it was a Coldwell Banker listing priced at (hold your laughter) $2,800,000. The original MLS listing didn't even have a picture of the house, it had a nice fancy cartoon drawn house drawn over the present house.

This was the ultimate bubble listing. It wasn't about the house that existed in REALITY - instead the brokerage wanted everyone to buy into a fantasy cartoon house that only existed in the MLS. After all, that's where the value is - in pretend homes. Gee, thanks, Coldwell Banker.

Well, the sales tactics didn't work and its all over now. According to the new MLS listing that hit the system today, the property is now bank owned and priced at $937,800, roughly 66% less than Coldwell Banker's original price. I'm really happy for the buyers out there who didn't fall prey to the original list price.

Next time you see a Coldwell Banker listing, think of this one - how much do you really trust these people to present a property with a fair market price? I'll let the commenters answer that one.

Crystal Cove Home Values Continue Downward Plunge

During the bubble, many realtors lured buyers of Crystal Cove homes for $1000 per square foot. That price point was thought to be a rock solid value even well after the market started plunging downward.

Not so anymore. Awash in foreclosures, the asking prices on some Crystal Cove properties are squarely in the $600 per square foot range.

And the sale prices probably will be less than the asking prices.

Hello, $500 per square foot! A 50% decline. And more declines will come after the summer buying season fizzles to a close. Your agent won't tell you that, but I will.

Here are some of the properties:

1. 24 Sidra Cove; asking $665 sq/ft
2. 106 Sidney Bay Drive; Asking $690 sq/ft
3. 11 Secret Cove; Asking $746 sq/ft
4. 100 Sidney Bay Drive; Asking $616 sq/ft
5. 5 Secret Cove; Asking $574 sq/ft

3216 Tyrol - WTF Price up in Top of World

I noticed 3216 Tyrol in the MLS - it is a house with Irvine views (no ocean) up in the Top of the World neighborhood. I like this neighborhood because it seems to be family friendly and is flat. The Tyrol house has been for sale since 2007 at various prices, I think from above $3,000,000 to just below $2,000,000. Just like many other Laguna Beach home prices, this one should be treated with a lot of caution.

It is hidden pretty well in the online listings, but this home's prior sale price was about $2,000,000 in 2006 - a prime bubble year. Notably, the home's owners appear to be real estate agents and I wonder how the prior sale data has been kept out of the databases? Suspicious. Now that home values in Laguna Beach have retreated, in my opinion, to 2003 or so, this home's asking price is WAY overstated. I'd take 20%-30% off of the $2,000,000 prior sale price to arrive at today's value. I don't think this attempted home flip is going to work very well for the owners.

I've been in the house and it has great Irvine views, but the interior is really chopped up and it just feels like a small house. The kitchen is small for an expensive house and there is a narrow, one bedroom unit on the first floor that isn't really usable for much. On the other hand it has great deck space, a huge garage, but no pool.
Thoughts?

LA Times: High End Home Values Continue To Fall

This blog is about single family homes in Laguna and Newport. No matter what shape or size, they are all high end compared to the OC average home prices. In a recent article the LA times analyzed Dataquick's June statistics and the news on high end homes was not pretty:

"Although prices have firmed at the low end of the market, they are still falling in affluent communities, the home sales data released by MDA DataQuick on Wednesday show.

The high-end market did not suffer the rapid shock of subprime mortgage defaults and foreclosures that hammered the housing market's lower end. Sales stagnated as wealthier sellers held out for higher prices.

Now, however, some sellers "are realizing the market's not going to just bounce back" and are starting to sell homes for less than they had recently hoped to get."

Chapman Forecast - High End Home Prices Will Continue to Fall Well into 2010

Mr Blue's focus is on Newport Coast and Laguna Beach - properties well above the OC median price you generally read about in the media. The most recent data indicates that prices on Newport Coast and Laguna Beach homes most certainly will continue to fall almost all the way to 2011. Of course, the OC median price you may hear realtors talking about doesn't mean anything in Newport Coast or Laguna Beach, which are in the upper segment of home prices. The upper end prices have taken longer to start their plunge downward. Now that plunge is happening, as high end sellers cannot hold out forever with the hope of selling at a 2007 peak price.

The highest local authority in real estate in the OC is Chapman University's forecast, operated by Dr. Adibi. Just released, it says "Although our forecast suggests a bottoming out for median home prices, high-priced homes are still subject to further price erosions." If you buy, get a price that is below the present value of the home so you have a cushion to ride out the coming decline. That way you won't be upside down after owning for only a year. Good luck house hunting......

False Perceptions of a Turn Around

My favorite industry analyst, Ivy Zelman, has a good article in Builder magazine detailing the state of the market. Ivy basically says that there are some superficial indications of a bottom but that things will get worse.

Buyer's Remorse in Crystal Cove?

More data from Crystal Cove - 18 Rockshore just sold for $4.42 million after being listed for about $5 million. 18 Rockshore is a 3800 square foot, 5 bedroom home. Also, 16 Wharfside (3500 square feet, 6 bedrooms) sold in May for $3.1 million. A similar home at 7 Atlantis Cove sold in January for $3.2 million. All of these sold for hundreds of thousands less (or almost a million less) than the listing prices.

Time will tell and I'll certainly not wish anything bad on anyone, but in my opinion, these homes will take significant value hits as we go toward December, based on present trends. There are already Crystal Cove list prices in the low 3 millions that are poised to drop into the two million range and one home (20 Surfspray) up there by Rockshore is already listed in the mid 2 millions.

If I owned 18 Rockshore, I'd be needing "upside down" therapy right now. Not a good thing to need after just closing escrow. Any opinions about these values out there?

Crystal Cove Awash in Foreclosures

I've been househunting in Crystal Cove for a while now and I have also been carefully watching the foreclosure activity. Like anywhere else, a spike in foreclosure activity is likely to precede a drastic drop in home prices. The foreclosure activity includes recorded notices of default, trustees auctions and then the resulting properties are "bank owned."

Six months ago, there was only one property in crystal cove that had foreclosure activity. Three months ago or so there were five properties involved in foreclosure. And as of today, there are twelve, according to Realtytrac.com. This pretty much proves out what I've seen with the homes in Crystal Cove - home values are dropping fast. Homes that are priced high are just sitting there...... Some listings have drastically reduced listing prices as some owners have determined that it is better to get the home value now rather than lose more in the coming months.

How many of those "good" real estate agents have told our readers about this spike in foreclosure activity in Crystal Cove? If yours has, hang on to them - they really are paying attention to value indicators......

What Your Agent Won't Tell You About That Home You Want To Buy

Buying a home is not something people do very often. For this reason, most people rely on their buyer's agent for good advice.

Problem is - most agents will hide negative information from their clients because the agent wants that commission and wants it fast.

Take the Laguna Beach home market for example. Thanks to our friends at Trulia, the direction of home prices in Laguna Beach is readily apparent. Down. Down. Down. Down. Down.

The Trulia chart, with the red trend line I added, shows an amazing decline in median home prices in Laguna Beach. The decline shows no sign of stopping. The decline HAS NOT STOPPED.

You'd think every agent in town would be saying "If you buy, you should know you are buying a DECLINING asset. You know, like a car?" But, I'm guessing you have NEVER heard that from an agent. Right. I have only heard one agent even hint at this, and I know A LOT of agents. My conclusion is that greedy Agents are hiding important facts from buyers.

More likely, you've heard many agents say "Buying a home is a long term investment." These are the real estate agent code words for "You will lose money, and lose money quickly, but I won't tell you that."

Am I wrong? Or right?