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.


Anonymous said...

Hello Mr. Blue,

I like your take on the Newport Coast real estate market. My partner and I are seriously considering a move to the Newport Beach - Laguna Beach area after her children go off to college (which will be in a few years). So, we will not be purchasing anytime soon, but we continue to explore the area when we visit (usually in February).

Would you be interested in showing us the neighborhoods (for a fee of course) with the understanding that a purchase, if any, won't take place for a few years? I'm at newportcoast@frontier.com This is a temporary email address which I have set up for the purpose of receiving your reply. Thanks

Anonymous said...

Your analysis on per sq.ft. basis is just so simplistic, its funny.

Did you go visit these homes? Did you see one had an obstructed view?

Did you notice the builders and age of home was different?

I mean, did you anything other than go to redfin and look at sq ft. price and then write your blog?

I know this is a good way for you to get sales leads, but your viewpoint is so sophmoric.

You really need to go see a professional!

Anonymous said...

I'm currently in escrow for a house with an ocean view so I have no interest in driving down prices. But Blue is correct, these are very comparable houses. And if you call images #26-30 of 11 Currents "obstructed" you're nuts.

Anonymous said...

This one is a pure nonsense post. Are you seriously comparing a house with a panaramic ocean view to one with no view at all?

(And anon above, if you think pic 26 is a view from the house you are the most gullible rube ever.)

It's really silly to call these comparable. 11 Currents is one of the few houses in Crystal Cove significantly blocked by the home across the street.

Anonymous said...

11 Currents is no comp for 20 Timor Sea, but 28 Cruisers Blf is. Clearly 20 Timor Sea overpaid, but that is not a comment on Crystal Cove, but rather an overpay on the part of the 20 Timor Sea owners.

In other words, the 11 Currents sale suggests an UPWARD movement compared to the much superior 28 Cruisers house, which is the same size but with a nearly infinitely better view.

So at worst, there are mixed signals from the 11 Currents sale.

Mr. Blue said...

It sure is funny how some people in the business automatically come to the defense of every deal, even those that are questionable.

Only a "rube" would believe that absolutely no one overpays for house deals in the OC.

Future buyers can learn to avoid mistakes if past deals can be discussed.

Anon, what would you have told your buyer about making a full price offer on 20 Timor Sea? I'm scratching my head on that one.

As to 11 currents, Anon squaked about the years the homes were built. This is completely irrelevant in Crystal Cove and 11 currents is the newer home anyway. Why would an old house go for more? The answer is that it should't.

As to view, there may be a slight difference, but I drove up there and I had to look up at the backyard of 11 Currents from the street below. It points northwest and the northwest ocean view is what you see in the listing pictures. Then again, perhaps Anon wants to press his false adverstising claim against the listing agent of 11 Currents.

Mr. Blue said...

Last Anon, the 28 Cruisers sale could be read either way, but I think on balance that 20 Timor Sea should be valued at less that 28 Cruisers - the market in the Crystal Cove has declined since the June sale of 28 Cruisers. You can see that in the Redfin chart on either listing. The sale of 11 Currents would then fit the trend perfectly.

Lenz said...

realtors are professionals? LOL. One day we won't have to deal with these gasbags. All you need is the internet and an attorney. Good riddance!

Anonymous said...

Mr. Blue:

You are like the FOX NEWS of Crystal Cove.

I can always count on you for a keenly slanted view of the world.

If you dont think, model and home builder makes any difference in pricing; then you clearly are what you appear to be.

In the future, get out of your car, and go into the backyard and SEE THE VIEW. Not with a compass, not with the internet, but do a little homework before proclamation.

In this particular case, you have proven the value of someone who knows what they are doing.

You clearly are not that person

Anonymous said...

If you want to see a test (and some delusion), check out 26 Cruisers, today priced at $5.3, even though it sold at $5.175 in June 2008 just as the market was collapsing.

It's next door to 28 Cruisers, which is at the end of the culdesac, with a magnificent view and pool, which sold for $5.2 in June.

Unless 26 Cruisers has a beyong awesome interior, the starting price is silly on its face. Sure the expectation is it will sell under $5m like it should, but that list price has to be worth a laugh given its own sale history and the history of the better house next door.

If this sells for 4.5, then that would be in line with 28 Cruisers, anything under 4.2 though would show further weakening of the market since June.