Sunday, February 20, 2011

January Home Sale Data Shows Continued Weakness in Laguna Beach

The latest housing numbers for sales during January 2011 have just been released and have been published by Dataquick, a reliable source.  The median price numbers show a continued plunge in Laguna Beach, while Newport Coast has posted a good increase. The takeaway? Buyers in Laguna Beach need to be careful that they are not paying too much for a home that is declining in value every month.

I doubt home values in Newport Coast are actually going up - the median price increase probably is likely to more sales of discounted high end homes as compared to a year ago.  More high end homes than low end homes sold in January in Newport Coast as compared to last year.  Less high end homes sold in Laguna Beach and Corona Del Mar, as compared to low end homes.

The highlights:
Laguna Beach:
only 27 homes sold, median price down 16.7% to $1,020,000.

Coronal Del Mar:
only 12 homes sold, median price down 12.5% to $1,570,000.

Newport Coast:
only 11 homes sold,  but median price up 11.2% to $1,890,000

The changes in the median price statistic probably indicate that the mix of homes sold has changed.  When the median price goes up, that indicates more higher value homes have sold as compared to lower priced homes. 

Saturday, February 12, 2011

Crystal Cove Sale Trend Points to Huge Declines By Summer 2011

If the trend for Crystal Cove White Sails homes continues to next May, the price per square foot will be in the $500 range - down from the $800 range today.  This means huge losses for any new buyers and existing homeowners. Chart below.

Tuesday, February 1, 2011

Yet Another Recent Buyer Burned in Crystal Cove as Values Continue Crashing

28 Cruisers Bluff sold in June 2010 for $5,195,000.  And its value today? - Recent comps show a sagging market that has crushed the value of this home.  When someone loses a million dollars in home value after owning a home for only six months, there probably are some lessons learned and some important trends that a buyer should become aware of.   More detail below.

Crystal Cove, long resistant to falling home sale prices because its owners could simply afford "not to sell" is now at the tip of the deflating housing bubble in Orange County.  Of course, you won't hear this information from any real estate agent, but that's why I'm here - to make sure you get more than the positive fluff you may hear at open houses.

28 Cruisers Bluff had been languishing on the market for more than 700 days - being originally listed for sale in September, 2008.  It is a White Sails model with great ocean views, and 4 bedrooms in 5000 square feet on a large lot.  The White Sails models are all more or less the same kind of tract built homes.  The June sale price works out to $1039 per square foot.  This house was last sold when it was new in January of 2005 for about $3,300,000.  Common sense would put its value closer to that sale price than the listing price of the languishing listing.  But we don't need to postulate about the value - we have comps:

Three 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 ($820 per square foot.).  36 Gondoliers Bluff sold just 8 days later for $4,074,000 ($823 per square foot.). Then 6 Cruiser's Bluff sold in December for $4,150,000 ($756 per square foot.)

You can draw your own conclusions on the impact on the value of 28 Cruisers Bluff.  In my opinion, that home has lost more than 20% in value in about 6 months.  This is a huge loss, a million dollar loss. Buying an expensive house that is rapidly losing value is a bad idea!  A proven, bad idea.

In the $2.5-5 million price range, I believe there is a larger trend of Crystal Cove home values decreasing about $100,000 to $200,000 per month.  Buyer beware.

The main purpose of this blog is to focus on the importance of valuing a property accurately and discounting the fluff that is common from buyer's agents and listing agents.  When I point these things out, I'm not making  fun of any buyer - I feel for them, but I want to help that next buyer avoid the same mistake.