Wednesday, December 29, 2010
Dataquick November Stats Show Double Dip - Home Market Sinking
According to reputable real estate statistics company Dataquick, Southern California home sales fell in November to the second-lowest level for that month in 18 years, reflecting the weak economic recovery, a dormant new-home market and tight credit conditions. High end home sales are especially weak, but the median price paid for a home rose above a year earlier for the 12th consecutive month, though November’s gain was the tiniest yet. Buyers be careful out there - factor future home value declines into your offering prices!
Friday, December 17, 2010
OC Home Prices Falling - Double Dip Confirmed
More evidence that Orange County home values are on the decline once again! This year’s price rally has faded, according to the OC Register. If you are a home buyer, keep in mind that you are buying a declining asset and you will lose value every month, on top of your mortgage payment. Renting is far superior at this point in time.
This data comes from CoreLogic, whose Orange County slice of its nationwide home price indexes shows local values falling at a 2.56% annual rate in October.
It was the second month of year-over-year declines following eight consecutive increases. Before that upswing, the CoreLogic index for Orange County had fallen 37 straight months on a year-over-year basis.
This data comes from CoreLogic, whose Orange County slice of its nationwide home price indexes shows local values falling at a 2.56% annual rate in October.
It was the second month of year-over-year declines following eight consecutive increases. Before that upswing, the CoreLogic index for Orange County had fallen 37 straight months on a year-over-year basis.
Saturday, December 4, 2010
High End Listing Prices Too High - Increase in Price Reductions - OC Register
Buyers, another reason not to trust those high end list prices in Orange County - most were way too high and are being reduced by a whopping 10% compared to last year. Yet high end home sales are still stagnant. This means that even the reduced list prices are far above the real market values of these homes. Buying a high end home entails a risk that you will pay way too much and be left holding the bag. Can you say "poof, there goes your downpayment?"
For more info see the OC Register here.
For more info see the OC Register here.
Wednesday, November 24, 2010
Forecast: Calif. home prices to drop 9.9%
The OC register reports - Real estate trackers from FiServ and Moody’s Economy.com forecast that California home prices will fall 9.9% in the year ending in June 2011 — fourth biggest drop across the nation. Essentially, all meager gains from June 2009-2010 will evaporate......
Saturday, November 20, 2010
Recent Sales Weigh on 26 Cruisers Bluff
26 Cruisers Bluff, for sale at $5,300,000, is a White Sails model built by Taylor Woodrow in 2004. It has 4 bedrooms and is about 5000 square feet and has very nice ocean views. On a per square foot basis, it is priced at $1060 and this home last sold in mid-2008 for $5,175,000.
Two other White Sails homes have recently sold, both about 5000 square feet in size. 2 Gondoliers Bluff sold on November 8 for $4,100,000. 36 Gondoliers Bluff sold just 8 days later for $4,074,000.
Both of these recent sales were sold at prices of about $820 per square foot. You can draw your own conclusions.....
One last data point - 2 Gondoliers Bluff is a fantastic home, as shown by the photo below:
Two other White Sails homes have recently sold, both about 5000 square feet in size. 2 Gondoliers Bluff sold on November 8 for $4,100,000. 36 Gondoliers Bluff sold just 8 days later for $4,074,000.
Both of these recent sales were sold at prices of about $820 per square foot. You can draw your own conclusions.....
One last data point - 2 Gondoliers Bluff is a fantastic home, as shown by the photo below:
Tuesday, November 16, 2010
Laguna Letdown - Housing Prices Flat & Sales Sinking Marketwide - OC Register
More details at the OC Register, but in short, the housing market continued to struggle against fierce headwinds last month, losing ground in the face of tightfisted lenders and edgy buyers.
The median price of an Orange County home – or price at the midpoint of all sales – fell to $438,000 last month, housing tracker MDA DataQuick reported Tuesday.
Last month's median price also fell $12,000 from the 2010 high of $450,000 reached in May and July. That means that all the price gains of the past year have virtually evaporated.
The median price of an Orange County home – or price at the midpoint of all sales – fell to $438,000 last month, housing tracker MDA DataQuick reported Tuesday.
Last month's median price also fell $12,000 from the 2010 high of $450,000 reached in May and July. That means that all the price gains of the past year have virtually evaporated.
Thursday, November 11, 2010
$2 Million+ Homes Not Selling In Laguna - OC Register
It’s common to see homes for sale with prices well over $1 million in Laguna Beach, but is anyone buying those homes right now? Not really....
More on this from the OC Register is here.
More on this from the OC Register is here.
Monday, November 1, 2010
Freshest Dataquick Sales Numbers Show Continued Home Value Slide
The latest housing numbers for sales during the 22 day period ending October 8 have just been released and have been published by the OC Register.
The numbers show a continued plunge in Laguna Beach and Newport Coast. Corona Del Mar is slightly up year over year, but is unchanged from the September data i previously posted.
The highlights:
Laguna Beach:
only 32 homes sold, median price down 19.2% to $1,050,000.
Coronal Del Mar:
only 20 homes sold, median price up 3% to $1,498,000.
Newport Coast:
only 19 homes sold, median price down 8.1% to $1,540,000
The numbers show a continued plunge in Laguna Beach and Newport Coast. Corona Del Mar is slightly up year over year, but is unchanged from the September data i previously posted.
The highlights:
Laguna Beach:
only 32 homes sold, median price down 19.2% to $1,050,000.
Coronal Del Mar:
only 20 homes sold, median price up 3% to $1,498,000.
Newport Coast:
only 19 homes sold, median price down 8.1% to $1,540,000
Friday, October 29, 2010
Awesome Chart - What Year Have LA Home Values Rolled Back To?
This chart was part of the Anderson Forecast presentation at UCLA. LA home values are at a level similar to that of January 2004.
Thursday, October 28, 2010
One Seabourne Home May Sell - Another Seabourn Listing Fails in Crystal Cove
52 Sidney Bay was recently pulled from the market. Listed at a lofty $2.9 million, it didn't sell and may have been rented for substantially less than the cost of owning at $2.9 million. I saw a rental listing for this home recently, but cannot find it now.
The owners of 9 Atlantis Cove aggressively reduced their asking price to $2,395,000 and succeeded in drawing an offer from someone who is shopping the Seabourne models in Crystal Cove. Surprisingly, 9 Atlantis Cove is now listed as pending on Redfin. If it sells somewhere near the asking price, such a sale price probably would have been what the home would have sold for sometime in 2004, in my opinion.
Will the buyer stick around and close? Time will tell.
The remaining Seabourne homes for sale have been on and off the market for an average of 688 days.
This is the real time since the homes were first listed, even if they were taken on and off the market. Real estate agents commonly delist and relist properties so the days on the market (DOM) indicator from the MLS can be a lot less than reality. I find that my way of looking at DOM a useful indicator of market weakness because it really shows how long the seller has been trying, on and off, to sell a home.
The raw data is:
11 Secret Cove - 1731 days - First listed on Jan 31, 2006.
2 Secret Cove - 552 days - First listed in April 2009.
24 Wharfside Drive - 995 days - First listed in February 2008.
62 Sidney Bay - 56 days
5 Atlantis Cove - 106 days
The owners of 9 Atlantis Cove aggressively reduced their asking price to $2,395,000 and succeeded in drawing an offer from someone who is shopping the Seabourne models in Crystal Cove. Surprisingly, 9 Atlantis Cove is now listed as pending on Redfin. If it sells somewhere near the asking price, such a sale price probably would have been what the home would have sold for sometime in 2004, in my opinion.
Will the buyer stick around and close? Time will tell.
The remaining Seabourne homes for sale have been on and off the market for an average of 688 days.
This is the real time since the homes were first listed, even if they were taken on and off the market. Real estate agents commonly delist and relist properties so the days on the market (DOM) indicator from the MLS can be a lot less than reality. I find that my way of looking at DOM a useful indicator of market weakness because it really shows how long the seller has been trying, on and off, to sell a home.
The raw data is:
11 Secret Cove - 1731 days - First listed on Jan 31, 2006.
2 Secret Cove - 552 days - First listed in April 2009.
24 Wharfside Drive - 995 days - First listed in February 2008.
62 Sidney Bay - 56 days
5 Atlantis Cove - 106 days
Tuesday, October 26, 2010
Buyers Remorse Part IV - 16 Archipelago Sells for Less
One of my prior posts is about the 20 Timor Sea home sale last summer and how its lofty, full price sale of nearly $5,500,000 now compares to recent sales of comparable homes in Crystal Cove.
Well, hang on to your hats because 16 Archipelago just sold for $3,650,000.
16 Archipelago is a 5000 square foot, 5 bedroom home with a pool and breathtaking coastline views. 20 Timor Sea is a 5000 square foot, 4 bedroom home with a pool and breathtaking coastline views. You can look at the listings and make your own conclusions, but these homes look darn similar to me. This does not bode well for the value of the 20 Timor Sea home, in my opinion.....Dare I ask our real estate agent friends if 20 Timor Sea is now worth $3,650,000, a shocking $1,850,000 less than its purchase price of a few months ago????
Well, hang on to your hats because 16 Archipelago just sold for $3,650,000.
16 Archipelago is a 5000 square foot, 5 bedroom home with a pool and breathtaking coastline views. 20 Timor Sea is a 5000 square foot, 4 bedroom home with a pool and breathtaking coastline views. You can look at the listings and make your own conclusions, but these homes look darn similar to me. This does not bode well for the value of the 20 Timor Sea home, in my opinion.....Dare I ask our real estate agent friends if 20 Timor Sea is now worth $3,650,000, a shocking $1,850,000 less than its purchase price of a few months ago????
Saturday, October 23, 2010
After 3 years, Laguna Beach Mansion Sells for 2003 Price
1302 Skyline, a very high end french country farmhouse style mansion, sold in September for about $3,675,000. The home features 4 bedrooms and 4000 square feet of highly upgraded living spaces.
This home has been for sale on and off the MLS since 2007. One of those old listings was for 5,995,000 by James Ardery of Prudential California Realty. In my opinion, this seller lost millions by not competitively pricing the home in the first place. A competitive price long ago could have resulted in a sale, but instead the home sat on the market while home values sunk even lower.
The home was last purchased in August, 2004, for $4,400,000. The more recent sale price in September 2010 is probably equivalent to what the home would have sold for in 2003 or even 2002! This tells you where the luxury home market is on the OC coast.
What does this mean? If you are buying a home, try to determine what it would have sold for in 2003 - that is one indicator of the home's value today, despite the listing price.
The home was last purchased in August, 2004, for $4,400,000. The more recent sale price in September 2010 is probably equivalent to what the home would have sold for in 2003 or even 2002! This tells you where the luxury home market is on the OC coast.
What does this mean? If you are buying a home, try to determine what it would have sold for in 2003 - that is one indicator of the home's value today, despite the listing price.
Thursday, October 21, 2010
Huge Monthly Losses for 2009 Buyers in Corona Del Mar, Laguna Beach and Newport Coast
The housing numbers for September have just been released and have been published by the LA Times.
The numbers show a sinking market in Laguna Beach, Newport Beach, Newport Coast and Corona Del Mar. This runs contrary to what I have been hearing from most agents that the market has bottomed out or is increasing.
The highlights:
Laguna Beach:
only 28 homes sold, median price down 13.9% to $1,150,000.
Coronal Del Mar:
only 11 homes sold, median price down a whopping 25% to $1,500,000.
Newport Coast:
only 15 homes sold, median price down 8.3% to $1,650,000
Newport Beach is more or less flat, with some zips up a little and some down.
What does this mean to unfortunate buyers who purchased a median priced home about a year ago?
Losses. Big time.
Laguna Beach:
$186,000 loss in the last 12 months, which is about a $15,500 loss PER MONTH.
Corona Del Mar:
$500,000 loss in the last 12 months, which is about a $41,700 loss PER MONTH.
Newport Coast:
$159,300 loss in the last 12 months, which is about a $12,450 loss PER MONTH
When a real estate agent tells you that it is a good time to buy, don't take their word for it - do your own research and be careful. You could buy a property that will decline fast and put you underwater in no time at all. Of course, if and when that happens, your agent will not be around to help you share in the pain. They will be busy trying to sell houses to someone else and collect the commissions.
The numbers show a sinking market in Laguna Beach, Newport Beach, Newport Coast and Corona Del Mar. This runs contrary to what I have been hearing from most agents that the market has bottomed out or is increasing.
The highlights:
Laguna Beach:
only 28 homes sold, median price down 13.9% to $1,150,000.
Coronal Del Mar:
only 11 homes sold, median price down a whopping 25% to $1,500,000.
Newport Coast:
only 15 homes sold, median price down 8.3% to $1,650,000
Newport Beach is more or less flat, with some zips up a little and some down.
What does this mean to unfortunate buyers who purchased a median priced home about a year ago?
Losses. Big time.
Laguna Beach:
$186,000 loss in the last 12 months, which is about a $15,500 loss PER MONTH.
Corona Del Mar:
$500,000 loss in the last 12 months, which is about a $41,700 loss PER MONTH.
Newport Coast:
$159,300 loss in the last 12 months, which is about a $12,450 loss PER MONTH
When a real estate agent tells you that it is a good time to buy, don't take their word for it - do your own research and be careful. You could buy a property that will decline fast and put you underwater in no time at all. Of course, if and when that happens, your agent will not be around to help you share in the pain. They will be busy trying to sell houses to someone else and collect the commissions.
Tuesday, October 12, 2010
Buyers Remorse Part III - Another Recent Crystal Cove Buyer Burned
Lets say you just bought a nice home on 20 Timor Sea in Crystal Cove in July 2010 for about $5,500,000.
So far, so good, if you can afford to buy at that price. But read on and you'll discover how to lose over $400,000. Per month. UPDATE: It appears that the 20 Timor Sea buyer paid full list price for the home. Amazing that anyone would enter a deal at full list price in this market. Kudos to Jim Weisenbach of Surterre Properties Inc.for getting this for the home owner!
Anyhow, back to our history. July turns into August as months go by and sales slow even more in Crystal Cove.
Then your uphill neighbor, with a much bigger mansionesqe Crystal Cove home on 11 Currents, sells in October of 2010 for only $5,000,000. This is less than this home sold for in 2006.
Gulp. The 11 Currents sale is about 25% less on a per square foot basis compared to what was paid for 20 Timor Sea. That house on 20 Timor Sea is not looking so good now. A 25% decrease in value from $5.5 million is a loss of $1,375,000. In about 3 months. That's over a $400,000 loss per month. This is more evidence that the high end is declining........and that buyers need to be really careful - after the agents collect their commissions, it is the home owner that has to live with the transaction.
So far, so good, if you can afford to buy at that price. But read on and you'll discover how to lose over $400,000. Per month. UPDATE: It appears that the 20 Timor Sea buyer paid full list price for the home. Amazing that anyone would enter a deal at full list price in this market. Kudos to Jim Weisenbach of Surterre Properties Inc.for getting this for the home owner!
Anyhow, back to our history. July turns into August as months go by and sales slow even more in Crystal Cove.
Then your uphill neighbor, with a much bigger mansionesqe Crystal Cove home on 11 Currents, sells in October of 2010 for only $5,000,000. This is less than this home sold for in 2006.
Gulp. The 11 Currents sale is about 25% less on a per square foot basis compared to what was paid for 20 Timor Sea. That house on 20 Timor Sea is not looking so good now. A 25% decrease in value from $5.5 million is a loss of $1,375,000. In about 3 months. That's over a $400,000 loss per month. This is more evidence that the high end is declining........and that buyers need to be really careful - after the agents collect their commissions, it is the home owner that has to live with the transaction.
Friday, October 1, 2010
5 Shoreline Comp Casts Major Doubt on Crystal Cove Home Values
5 Shoreline is a 7000 square foot mansion on about a 1/3 of a flat acre. On top of that, it has ocean vistas, is on a golf course, and is walking distance to the beach. This is much better or equivalent to anything listed for sale at $5,000,000 or less in Crystal Cove. A comp it is.
In my opinion, this comp puts major doubt on most, if not all, of the asking prices for these homes.
Sunday, September 26, 2010
A Buyer's 10 Second Guide to Bull$hit You May Hear From A Real Estate Agent (Part I)
Below is real advice from a real estate agent on why it is a good time to buy. And I'm of course providing the reality as to why this is complete BS. If you are a buyer, you will hear such things every day. And it needs to stop.
Real Estate agent:
"Looks like you have conveniently "forgot" about all the sales in Crystal Cove with long time owners making some nice profits." (fill in any neighborhood for "Crystal Cove")
Thanks to the comments on this blog, we have no shortage of stupid comments from real estate agents. Problem is that some buyers actually believe this BS.
So, here is the reason why this real estate agent statement is BS: Whether or not to buy depends on the price of the home and what you think will happen to the value of the home in the next year, as compared to the price of renting. No doubt about this. You don't want to pay $3 million for something that will be worth $2 million only 12 months later. This is happening. Right now.
So, back to the stupid real estate agent comment. It just doesn't matter if the sellers have equity and are making "profits" or not. Say someone bought in 2000. Likely they would be able to sell for a profit even now so long as they didn't take out second and third mortgages. That doesn't mean YOU should buy. In fact, it has no logical connection whatsoever. There is no reasonable connection to the economic analysis a buyer must make. It truly is BS. By the way, the sunset is fantastic tonight. ;)
Real Estate agent:
"Looks like you have conveniently "forgot" about all the sales in Crystal Cove with long time owners making some nice profits." (fill in any neighborhood for "Crystal Cove")
Thanks to the comments on this blog, we have no shortage of stupid comments from real estate agents. Problem is that some buyers actually believe this BS.
So, here is the reason why this real estate agent statement is BS: Whether or not to buy depends on the price of the home and what you think will happen to the value of the home in the next year, as compared to the price of renting. No doubt about this. You don't want to pay $3 million for something that will be worth $2 million only 12 months later. This is happening. Right now.
So, back to the stupid real estate agent comment. It just doesn't matter if the sellers have equity and are making "profits" or not. Say someone bought in 2000. Likely they would be able to sell for a profit even now so long as they didn't take out second and third mortgages. That doesn't mean YOU should buy. In fact, it has no logical connection whatsoever. There is no reasonable connection to the economic analysis a buyer must make. It truly is BS. By the way, the sunset is fantastic tonight. ;)
Sunday, September 19, 2010
Glut of Seabourne Homes for Sale In Crystal Cove
Looked this morning and there are now 8 "Seabourne" model homes for sale. In addition to the couple of Seabourne homes that have been listed for sale at one time or another for *** years ****, there are now 6 more. In my opinion, none of them are priced to sell and none have sold. The proof is in the pudding, as they say. Be careful buying - if any of the owners really wants to sell, I expect major price reductions.
Tuesday, September 7, 2010
Demand for OC Homes Plunges 27%
A lackluster summer finishes up. Just in from the OC Register - the number of pending sales in the OC has dropped a whopping 27% since April, 2010.
The weakest segment of the market is homes priced above $1,000,000. This is a signal that price pressures in this segment will be downward this fall. This price point covers almost every single family home in Laguna Beach, Newport Beach and Newport Coast.
An 8% fall in the price of a $3,000,000 home over 12 months results in about a negative $20,000 per MONTH being added to your real costs of owning. Not something I would buy into right now.
The weakest segment of the market is homes priced above $1,000,000. This is a signal that price pressures in this segment will be downward this fall. This price point covers almost every single family home in Laguna Beach, Newport Beach and Newport Coast.
An 8% fall in the price of a $3,000,000 home over 12 months results in about a negative $20,000 per MONTH being added to your real costs of owning. Not something I would buy into right now.
Thursday, September 2, 2010
"Coastal Expert" Real Estate Agent Lampooned on Local Discussion Board
"Coastal Expert" real estate agent Hillary Caston has been flamed on the ocreader discussion board over her latest article that discusses a huge new government effort to rescue the OC real estate market.
Further investigation by Bluemove's crack team has revealed Ms. Caston hawking homes while dressed as a pirate. "Coastal Expert" indeed.
I guess it is time to buy!!! With all this government money coming, we should go back to the good old "pirate" days of 2006 home values in Laguna Beach!!
Further investigation by Bluemove's crack team has revealed Ms. Caston hawking homes while dressed as a pirate. "Coastal Expert" indeed.
Thursday, August 26, 2010
52 Sidney Bay Price Analysis - Makes sense to Rent, not to Own
I have completed a rent versus buy analysis on 52 Sidney Bay Drive in Crystal Cove. Listed for sale at $2,895,000, this home recently rented for $6,000 per month.
The result? Renting wins hands down, costing $5,103 per month. Buying is a real disaster - it could cost $20,478 PER MONTH.
And this is a conservative estimate because it assumes only a 4.1% drop in the home's value over the next 12 months. If this drop in home value turns out to be in my opinion a more realistic 8%, then the cost of owning in the next year becomes a whopping $30,000 PER MONTH.
Of course, one interpretation of this analysis is that this home is hopelessly overpriced. And I agree with that.
Here's the backup data:
The result? Renting wins hands down, costing $5,103 per month. Buying is a real disaster - it could cost $20,478 PER MONTH.
And this is a conservative estimate because it assumes only a 4.1% drop in the home's value over the next 12 months. If this drop in home value turns out to be in my opinion a more realistic 8%, then the cost of owning in the next year becomes a whopping $30,000 PER MONTH.
Of course, one interpretation of this analysis is that this home is hopelessly overpriced. And I agree with that.
Here's the backup data:
| Rent | Own | ||
| Rent Payment | -$6,000 | Mortgage Payment (20% down) | -$12,433 |
| Monthly Return on Unspent Downpayment | $897 | Principle | $2,800 |
| Total Monthly Cost | -$5,103 | Mort Tax Benefit | $2,040 |
| Insurance | -$200 | ||
| Maintenance | -$200 | ||
| Association Dues | -$615 | ||
| Property Taxes | -$3,016 | ||
| Prop Tax Tax Bene | $1,146 | ||
| Decline in home value | -$10,000 | ||
| Total Monthly Cost | -$20,478 |
Tuesday, August 24, 2010
Plunging Home Sales Could Sink Recovery
A recent analysis by CNNMoney.com shows that a double dip in housing prices is coming. Existing home sales sank 27.2% in July, twice as much as analysts expected. This is the lowest level since 1995.
What does this mean for Newport Beach and Laguna Beach home sales? More pain - high end home values will fall faster and have more room to fall than the lower end of the market. A new owner of a high end home likely will hemorrhage money because of a decreasing home value, every month, month in and month out. Of course, you won't hear this from a real estate agent who is trying to sell you a house.
"Home sales were eye-wateringly weak in July," said economist Paul Dales of Capital Economics. "It is becoming abundantly clear that the housing market is undermining the already faltering wider economic recovery. With an increasingly inevitable double-dip in housing prices yet to come, things could get a lot worse."
It remains to be seen how the sale prospects of existing listings in such places as Crystal Cove will be impacted. Keep an eye on these listings:
5 Atlantis Cove
9 Atlantis Cove
52 Sidney Bay Drive
28 Tideline Bluff
What does this mean for Newport Beach and Laguna Beach home sales? More pain - high end home values will fall faster and have more room to fall than the lower end of the market. A new owner of a high end home likely will hemorrhage money because of a decreasing home value, every month, month in and month out. Of course, you won't hear this from a real estate agent who is trying to sell you a house.
"Home sales were eye-wateringly weak in July," said economist Paul Dales of Capital Economics. "It is becoming abundantly clear that the housing market is undermining the already faltering wider economic recovery. With an increasingly inevitable double-dip in housing prices yet to come, things could get a lot worse."
It remains to be seen how the sale prospects of existing listings in such places as Crystal Cove will be impacted. Keep an eye on these listings:
5 Atlantis Cove
9 Atlantis Cove
52 Sidney Bay Drive
28 Tideline Bluff
Friday, August 20, 2010
Renting Makes Sense in the High End
I'll say it now. The new American dream at present is renting. And there is nothing wrong with that!
This is driven by the high cost of owning. In the high end, why in the world would anyone buy when they can rent a high end home for close to half the cost of owning. Not everyone can play this angle of course. But the real cost of renting a home that would cost about $6,800 a month to own is roughly $4,000 per month. This assumes of course that the value of the home is flat which is realistic for at least the next 2 years. This also assumes that you don't spend your huge downpayment and it is earning 3% interest or dividend income and that you are in the 40% tax bracket.
It gets really interesting if you then factor in decreasing home values in the high end. This is reality and the homeowner really takes it in the shorts. A $600,000 decline in the home's value in one year is $50,000 per MONTH in losses for the owner. But not the renter. I'm so glad the owner is subsidizing my lifestyle while I live in his deluxe OC beach-close home! I'll enjoy it while it lasts! Then I'll buy.
This is driven by the high cost of owning. In the high end, why in the world would anyone buy when they can rent a high end home for close to half the cost of owning. Not everyone can play this angle of course. But the real cost of renting a home that would cost about $6,800 a month to own is roughly $4,000 per month. This assumes of course that the value of the home is flat which is realistic for at least the next 2 years. This also assumes that you don't spend your huge downpayment and it is earning 3% interest or dividend income and that you are in the 40% tax bracket.
It gets really interesting if you then factor in decreasing home values in the high end. This is reality and the homeowner really takes it in the shorts. A $600,000 decline in the home's value in one year is $50,000 per MONTH in losses for the owner. But not the renter. I'm so glad the owner is subsidizing my lifestyle while I live in his deluxe OC beach-close home! I'll enjoy it while it lasts! Then I'll buy.
Monday, August 9, 2010
Laguna Beach Sales Numbers Drop at Height of Summer Selling Season
Not a good sign for the real estate market in Laguna Beach.
The number of home sales in Laguna Beach is down 19.4% for the 22 business days ending July 21 based on DataQuick’s freshest stats. Normally, sales pick up in the summer. Not this summer. And a long winter is around the corner.
The chart in the OC Register is here.
The number of home sales in Laguna Beach is down 19.4% for the 22 business days ending July 21 based on DataQuick’s freshest stats. Normally, sales pick up in the summer. Not this summer. And a long winter is around the corner.
The chart in the OC Register is here.
Wednesday, August 4, 2010
Median Laguna Beach Single Family Home Price Bounces Back in June
The June numbers are in and the median single family home price has improved from May. According to Dataquick, the median price for a single family home in Laguna Beach in June is $1,288,000 as compared to $985,000 in May. As compared to June 2009, the median price is up about 2%, which is flat. Summer is the big home selling season so more houses naturally sell at this time.
What does this mean? Some higher end homes in Laguna Beach are selling. But only some. Most of the homes I am tracking have not sold and the price reductions continue. It remains to be seen what happens after the summer selling season. The downward trend in the high end could continue, slowing sinking the value of the homes bought in the summer. Be careful if you are buying - factor this into any offers you make.
Real estate agents are, of course, welcome to comment in a meaningful fashion.
What does this mean? Some higher end homes in Laguna Beach are selling. But only some. Most of the homes I am tracking have not sold and the price reductions continue. It remains to be seen what happens after the summer selling season. The downward trend in the high end could continue, slowing sinking the value of the homes bought in the summer. Be careful if you are buying - factor this into any offers you make.
Real estate agents are, of course, welcome to comment in a meaningful fashion.
Friday, July 30, 2010
5 Atlantis Cove Listing Has High Aspirations
5 Atlantis Cove in Crystal Cove was recently listed by Jane Polley for $3,195,000. Considering that two Seabourne type homes were listed and failed to sell at $2,995,000 or so, I'd say this listing is rather ambitious. Another Seabourne model without a view sold a while ago for $2,200,000 and in my opinion would sell for less today.
5 Atlantis Cove does not have the best ocean view because it mostly faces a gully, not the ocean. According to the property records, a notice of default for a huge loan on another property was mailed to this home in May. The listing also omits the square footage - I wonder if this is a way to avoid the question of what Seabourne models have been selling or listing for on a per square foot basis?
All in all, in my opinion, I'm all in on this one for $2,100,000!
5 Atlantis Cove does not have the best ocean view because it mostly faces a gully, not the ocean. According to the property records, a notice of default for a huge loan on another property was mailed to this home in May. The listing also omits the square footage - I wonder if this is a way to avoid the question of what Seabourne models have been selling or listing for on a per square foot basis?
All in all, in my opinion, I'm all in on this one for $2,100,000!
Monday, July 12, 2010
Unrealistic Sellers Flood OC's Home Market
The OC Register confirms that sellers have flooded the OC home market with homes that are priced unrealistically high. Buyers purchasing in the high end may end up paying too much. Way too much.
Sunday, July 4, 2010
Local Real Estate Consultant Says Use 2003 Sale Prices to Determine Home Prices Today
Interesting post on Lansner's blog:
We believe 2003 prices are a reasonable estimate for most home values today. Obviously, this is a very back-of-the-envelope analysis and our work with clients is more targeted toward the decisions they are trying to make.
Many many homes in Laguna Beach and Newport Beach are listed at prices way over 2003 levels. Buyers need to be careful to avoid drastically overpaying for a home.
We believe 2003 prices are a reasonable estimate for most home values today. Obviously, this is a very back-of-the-envelope analysis and our work with clients is more targeted toward the decisions they are trying to make.
Many many homes in Laguna Beach and Newport Beach are listed at prices way over 2003 levels. Buyers need to be careful to avoid drastically overpaying for a home.
Wednesday, June 23, 2010
Median Laguna Beach Single Family Home Price Plunges to New Low In May
The May numbers are in and the median prices is still plunging downward. According to Dataquick, the median price for a single family home in Laguna Beach in May declined to $985,000. This is the first time I have seen it below $1,000,000.
What does this mean? The high end in Laguna Beach is still weak. The value of these homes is going down or are not selling and this is pushing the median price downward. The trend is down. Be careful if you are buying - factor this into any offers you make.
Real estate agents are, of course, welcome to comment.
What does this mean? The high end in Laguna Beach is still weak. The value of these homes is going down or are not selling and this is pushing the median price downward. The trend is down. Be careful if you are buying - factor this into any offers you make.
Real estate agents are, of course, welcome to comment.
Tuesday, June 8, 2010
Buyers Remorse in Top of World Part II
We've written about the sale of a home on Park Place and how the sale price of $1.62 million didn't compare favorably to some local homes that recently sold.
Well, hold on to your hats for what in my opinion could be a real estate disaster in the making, but first a little information on the Park Place neighborhood.
Park Place is a street of older homes in the family friendly Top of the World neighborhood in Laguna Beach. The homes were built in the 1980's and are well kept, but are hardly custom high end homes. Park Place is like a little slice of 1980's Irvine. If you are a higher end purchaser, this neighborhood will be disappointing. I'm not saying that is bad - I'm just sayin what's what.
Anyhow, back to the home on Park Place. We had earlier wondered why the buyer had paid so much for this home, given the low priced comps that were located very close by. Now, the buyer has put up the poles and ribbons that indicate a complete remodel. OMG, the buyer is putting MORE money into this home just like in the go go days of 2007!
Now, another close house on Park Place is for sale for $1.59 million. No big deal, right? Well, that home is 700 square feet bigger AND IT HAS A POOL. And it may not even sell for the listing price. So that home on Park Place is being offered at $457 per square foot. If you value the home sold on Park Place at that price, it is worth, gulp, only $1.295 million. And it doesn't have a pool. Subtract $100,000 for that, leaving you with a value of $1.195 million.
The buyer of the Park Place home took out a loan of $1,200,000 and therefore made a downpayment of $420,000. What happened to the value of the downpayment? Well, it's probably gone. Gone in 2 months. Close escrow on the house in April, gone in June. Be carefule and do your homework before you buy folks!!!!!
Oh yeah, the real estate agents have their commission payments.
Sunday, May 23, 2010
Crystal Cove Listing Fail
Recently, 2 Baffin Bay was listed for $2,995,000. Several open houses were held. Much gushing about the extra rooms in this home, which was renovated to add square footage. This was touted as a "GREAT VALUE IN CRYSTAL COVE" Hah. Right.
No sale. Fail. Now being rented out.
What does this mean? This is more evidence of weakness in Crystal Cove. This especially demonstrates the falling home values in the "Seabourne" models on the lower part of the hill. They are all pretty much the same - interchangeable comps. If the listing price was somewhere close to the real market value of this home, it would have sold.
Someone could conclude then that the value of this home is much less than $2.9 million. $2.5 million? $2.4 million? The real value of these single family homes is probably lower than the high priced condo sale that happened earlier in the year. Ooops - wouldn't want to be that buyer. Any thoughts out there?
Friday, May 7, 2010
Laguna Beach Foreclosures Skyrocket - More Downward Price Pressure Coming
The latest data from the OC Register shows a whopping 66% increase in Laguna Beach foreclosures. This means more distressed properties will hit the market. This means downward price pressure. If you buy, buy low so you don't end up underwater on the day you close!
Sunday, May 2, 2010
Top of the World - Large Homes Sell at Less Than $400 Per Square Foot
Recent comps in the Laguna Beach Top of the World neighborhood indicate that the price per square foot for these larger family homes has dropped way below $400 per square foot.
3216 Tyrol - $358 sq/ft, sold on February 26, 2010
2556 Temple Hills Drive - $389 sq/ft, sold on April 16, 2010.
2255 Bridge Road - $358 sq/ft, sold on January 8, 2010.
Notably, only a few houses away from 3216 Tyrol is the above home on Park Place, which sold on April 9 for a whopping $571 sq/ft, a total of $1,620,000. There is virtually no difference in the non-ocean views between these two homes. If the Park Place home was valued even at $400 sq/ft, the price would have been $1,140,000. If that valuation is used, it is almost a $500,000 loss the very second the buyer took title to the house. Possibly, they are upside down right now, even before the housewarming party. I wonder if the new buyers were aware of these recent comps? They paid more than the house sold for in 2004, which can be used to judge value. LOL if they have to resell anytime in the coming years!
Sunday, March 21, 2010
1130 Summit Drive - A New Low Comp Killer For Laguna Beach Luxury Housing
I've written about 1130 Summit Drive before. It is a newer modern house with ocean views but no ocean access. A rumor posted by a reader on this blog indicate that it has been sold for $2.38 million. If true, this represents a huge reduction from its original list price, which was $5,000,000 in 2007. According to the prior link, it was Lee Ann Canaday trying to get that price from someone. Didn't work.
The sale price would be more than a 50% reduction from the $5,000,000 price that turned out to be completely unrealistic.
All in all, once the sale is confirmed, this will be a comp for Laguna Beach at $496 per square foot. There are a lot of houses out there priced way above that at $700 or $800 or $1000 per square foot. I'd advise a healthy dose of caution when dealing with listing agents claiming homes can be valued at these prices, especially homes with views, but no ocean access. I personally think the buyer paid a little too much, but everyone has their own way to value things.
The sale price would be more than a 50% reduction from the $5,000,000 price that turned out to be completely unrealistic.
All in all, once the sale is confirmed, this will be a comp for Laguna Beach at $496 per square foot. There are a lot of houses out there priced way above that at $700 or $800 or $1000 per square foot. I'd advise a healthy dose of caution when dealing with listing agents claiming homes can be valued at these prices, especially homes with views, but no ocean access. I personally think the buyer paid a little too much, but everyone has their own way to value things.
Friday, March 12, 2010
Foreclosure Activity Keeps Surging in Crystal Cove
Time for an update on foreclosure activity in Crystal Cove. Like anywhere else, a spike in foreclosure activity is likely to precede a drastic drop in home prices.
And the Crystal Cove foreclosure activity is UP since I last checked.
The foreclosure activity includes recorded notices of default, trustees auctions and then the resulting properties are "bank owned."
About twelve months ago, there was only one property in crystal cove that had foreclosure activity. About six months ago or so there were five properties involved in foreclosure. The twelve. And as of today, there are thirteen, according to Realtytrac.com. This pretty much proves out what I've seen with the homes in Crystal Cove - homes can't be sold for the debt they carry and home values are dropping fast. Homes that are priced high are just sitting there with a few exceptions...... 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? Or do you see agents citing the same old and tired statistics. Be careful out there......
And the Crystal Cove foreclosure activity is UP since I last checked.
The foreclosure activity includes recorded notices of default, trustees auctions and then the resulting properties are "bank owned."
About twelve months ago, there was only one property in crystal cove that had foreclosure activity. About six months ago or so there were five properties involved in foreclosure. The twelve. And as of today, there are thirteen, according to Realtytrac.com. This pretty much proves out what I've seen with the homes in Crystal Cove - homes can't be sold for the debt they carry and home values are dropping fast. Homes that are priced high are just sitting there with a few exceptions...... 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? Or do you see agents citing the same old and tired statistics. Be careful out there......
Thursday, March 4, 2010
LA Times - High End Owners Forced to Drop Prices
Good article on high end homeowners testing the market, then having to make huge cuts to their asking prices. Testing the market? Is that like a hunt for the rare moron who will drastically overpay for a house? I'd say there are a lot of owners "testing the market" in Crystal Cove, Neport and Laguna Beach.
Saturday, February 27, 2010
$358 Per Square Foot in Top of World - Bluemove's Value Prediction on 3216 Tyrol Comes to Pass - It sells for about 50% of the original list price
I've previously written last July about the value of 3216 Tyrol, which at one time was listed for sale at $3.2 or $3.4 million, and more recently listed for about $2 million. I said at the time, i'd pay 20%-30% less, given that the home was purchased in 2007 for $2M, back when values were a lot higher. My inescapable conclusion? The home in my opinion was worth to me much less than $2 million.
Well, it just sold for $1,685,000.
This is why I do not trust whatsoever the original listing prices for some of the homes for sale in Laguna Beach as being representative of what I should pay for a home.
This sets a comp price point of $358 per square foot for homes in the Top of the World Neighborhood. This is yet another decline. You probably won't hear about this from your agent. Until you ask.
Tuesday, February 16, 2010
Buyers Remorse Part III, More Recent Buyers in Crystal Cove Lose Big Just After Escrow Closes
We have been documenting the crash in Cyrstal Cove home prices.
More recent buyers have been burned - and their homes fell steeply in value only months after the close of escrow, if not on the very day escrow closed. This blog has warned buyers to be careful with plunging Crystal Cove real estate values. Buying a home in Crystal Cove is sort of like buying a new car - you leave the lot and you've lost a healthy chunk of what you paid.
Case in point - The buyer of 124 Sidney Bay Drive, bought last June, has probably lost well over $500,000 of value after only about 4 months of ownership. And things are not getting better.
The home was bought for $2,650,000. This is $684 per square foot. The buyers agent identified by Redfin.com, is Rick Langevin of Surterre Properties Inc. Read on for some nearby sales.
The homes on Sidney Bay Drive are largely the same kind of Tuscan stucco boxes, but I've adjusted the selling price for the differences in square footage.
Only 4 months later, 100 Sidney Bay Drive sold in October 2009 for $1,900,000. This is $491 per square foot.
Then 1 month after that, 106 Sidney Bay Drive sold in November 2009 for $1,652,000! This is $561 per square foot. Likely they never knew about the comp at 100 Sidney Bay drive because i sold only a few weeks before. Some may conclude that they paid $60 per square foot too much....
Factor all of this in and the 124 Sidney Bay property is worth a lot less based on these recent sales.
Be careful out there.......
More recent buyers have been burned - and their homes fell steeply in value only months after the close of escrow, if not on the very day escrow closed. This blog has warned buyers to be careful with plunging Crystal Cove real estate values. Buying a home in Crystal Cove is sort of like buying a new car - you leave the lot and you've lost a healthy chunk of what you paid.
Case in point - The buyer of 124 Sidney Bay Drive, bought last June, has probably lost well over $500,000 of value after only about 4 months of ownership. And things are not getting better.
The home was bought for $2,650,000. This is $684 per square foot. The buyers agent identified by Redfin.com, is Rick Langevin of Surterre Properties Inc. Read on for some nearby sales.
The homes on Sidney Bay Drive are largely the same kind of Tuscan stucco boxes, but I've adjusted the selling price for the differences in square footage.
Only 4 months later, 100 Sidney Bay Drive sold in October 2009 for $1,900,000. This is $491 per square foot.
Then 1 month after that, 106 Sidney Bay Drive sold in November 2009 for $1,652,000! This is $561 per square foot. Likely they never knew about the comp at 100 Sidney Bay drive because i sold only a few weeks before. Some may conclude that they paid $60 per square foot too much....
Factor all of this in and the 124 Sidney Bay property is worth a lot less based on these recent sales.
Be careful out there.......
Sunday, February 14, 2010
Accurate Forecaster Warns - Don't Buy - High End Homes Such as Those in Newport and Laguna Beach Will Continue to Fall Through End of 2010
I recently had the pleasure of attending a presentation of Dr Esmael Adibi, who has a track record second to none at predicting the OC housing market. His presentation was very credible - he reviewed his predictions from last year and they have come to pass. His message? DO NOT BUY a home in places like Newport Beach or Laguna Beach until at least the end of 2010. He said that such high end value areas will continue to fall in value. For a median price house in cheaper neighborhoods, Adibi said it is OK to buy now.
My take is that buying a home in Newport Beach or Laguna Beach is just like buying a car - drive it off the lot and take a huge hit in value. Closing escrow is just like driving off the car lot - buy a house in these beach towns and close escrow and LOSE a ton of money from the value decline during the escrow period. And for these hapless new owners, more losses are coming, with every passing day. Of course, real estate agents get paid on the day escrow closes, so they have absolutely no interest in what happens after that - you're on your own if you are a buyer!
Esmael Adibi is director of Chapman University’s Anderson Center for Economic Research. He has a stunningly accurate track record on predicting the housing market. He was early with a prediction that the O.C. housing market was in for a fall.
I'm standing by watching the Laguna Beach, Newport Beach and Crystal Cove home prices decline...........
Tuesday, January 5, 2010
Sale of Repo at 1130 Summit Drive Fails - it Falls Out of Escrow
We've written about 1130 Summit Drive, which supposedly (according to comments posted on this blog) garnered offers in the neighborhood of $2 million and perhaps one offer with a higher amount that was chosen to go into escrow.
Well, so much for that - the home presumably fell out of escrow and was relisted at the end of December and the price was reduced by about $35,000, to $2.37 million.
Does anyone know what happened? Problems with the buyer? Cold feet? Something wrong with the house?
At a minimum, this price reduction may impact the home in escrow next door at 1289 La Mirada Street. This older home in need of updating is one lot up the hill but on a better, flat street, but now it may be worth less than its lofty listing price of nearly $2 million, given that the 1130 Summit Drive house is moving downward in the direction of that price. They are virtually the same square footage Both of these homes are in Arch Beach Heights area of Laguna Beach, which is one of the less desirable areas in Laguna Beach and is not known as an area packed with really expensive homes. I wonder if the La Mirada buyer will get cold feet.
The listing broker for both homes is the same - Prudential California Realty. I wonder if this broker will tell the buyer of the La Mirada home about the failed sale of the neighboring house? Or will the buyer's agent be smart enough to find out about it? This failed sale may provide a very relevant comp data point for the La Mirada house. And that comp data point has fallen in value judging from the recent price reductoin......tick, tick, tick.....will another price reduction come? Probably..........
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