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, 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...........