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.

6 comments:

Anonymous said...

It looks like you are just comparing median prices on limited sales? Surely you have to know that that data set is of limited value, at best. It could be that the mix of homes is changing, or it could be that a couple extra sales on either side of the median distorted the month's metrics.

I agree with your conclusions. I usually do. But you tend to use the same superficial statistical analysis to "make" your case that realtors use to make theirs. I would encourage you to dig a little deeper in your analysis.

Mr. Blue said...

The value of the data is not perfect, but there is not much data that is freely available.

So, yes, in order to make this comparison more valid, the distribution of sale prices would have to be similar to the distribution of sales prices from last year. But that may be the case given by belief that few high end homes sold last year and few high end homes sold this year.

On the other hand, if the median price was less solely because less high end homes were selling, then the top half of the market would be under pricing pressure. It would be reasonable to expect then that recent buyers in that price range have lost money by way of declining home values.

Anonymous said...

Blue states "But that may be the case given by belief that few high end homes sold last year and few high end homes sold this year. "

ACTUALLY, the facts show that statement as "FALSE".

We already discussed this fact earlier in one your blogs. High end homes are selling, check redfin, see crystal cove.....


You are the FOX news of crystal cove...keep it coming..it just makes me laugh

Mr. Blue said...

Anon, you are completely correct!
Many, many high end homes are selling. Say it again and it may come true - "Many high end homes are selling. Many high end homes are selling." How on earth could I have missed such major market activity? ;)

Seriously, "High end homes are selling" really doesn't tell anyone anything, does it? If I asked an agent for market advice and heard that, I'd fire him right then and there. The sad thing is that the average home buyer would swallow such BS, hook, line, and sinker.

Anonymous said...

Blue:

I dont think saying "high end homes are selling" is any more BS than you saying "few high end homes sold last year and few high end homes sold this year. "

I would fire you, because you do not understand the market.

You use information to infer facts...when the facts don't suit you, you just ignore them.

Wishing that nobody is buying does not make it fact.

You can just keep wishing.

Mr. Blue said...

Anon, during the good times, real estate agents shop the rise in median prices around like Moses with the Ten Commandments to anyone who will listen, and then some.

If you have an issue with the data I have posted, or think it shows that the market is going up, please feel free to post your reasons.

If there are facts that you think aren't here, then post them already. I don't see any.