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.

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