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

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???? 

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.

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.

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.

Friday, October 1, 2010

5 Shoreline Comp Casts Major Doubt on Crystal Cove Home Values

5 Shoreline, a 7000+ square foot mansion on the ocean side of PCH, just sold for $3,195,000. That's $435 per square foot. This home is on the ocean side of PCH and on the Pelican Hill Golf Course. Just south on PCH there are plenty of Crystal Cove home listings for homes on the inland side of PCH for up to double the price. Of course, most of these homes are just sitting there, with no buyer activity.

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.