Blue Move

Summer Recap - Risky to Buy

2011-10-15T20:45:00.000-07:00

Time for a summer recap on the housing market from Newport Beach to Laguna Beach.
Bottom line is that it was a terrible summer for home values in these areas, especially Newport Coast and Laguna Beach. Sales fell flat compared to last summer, which was itself less than fabulous. Sale prices are declining, as are the number of sales. You can hear a pin drop for the lack of homes selling.
In my opinion, buying a property at this time is very risky. The main risk being that the property you buy continues to go down in value, losing you 10's of thousands of dollars a month. Of course, you won't hear that from your real estate agent, who is hungry for a commission..........

Summer Buying Season Flops - Beach Town Home Values Continue Downward Plunge

2011-07-30T06:52:00.000-07:00

Normally, a lot of homes sell in the summer buying season in the OC beach towns. Not this summer.
The OC Register just reported that the number of sales and the median price in the OC beach towns is down. The median price is down 7.8% and the number of sales is down 5.3%.

What does this mean to potential buyers? It means that home prices are going down and, as a new owner, you will lose value on your new home, month in and month out. The median price and lack of sales will put downward pressure on home values. The lack of sales could be interpreted to mean that there are many overpriced home listings on the market. Buyers need to be very careful.....

These 12 Real Estate Stats Scream One Thing

2011-05-30T23:41:00.000-07:00

Interesting article posted by Terran on Talk Irvine: http://www.wallstreetdaily.com/2011/05/26/cme-real-estate-prices/?source=patrick.net#content

The bottom line:

"Whatever you do, though, don’t rush to buy residential real estate. As I’ve hopefully demonstrated by now, prices are headed one way from here – down. So even though local markets differ, chances are you’ll get an even better deal the longer you wait."

Laguna Beach continues to sink, just like the broader, declining market...

South Laguna Comp Check - 2 South Portola - 37% off Orginal List

2011-05-15T22:44:00.000-07:00

South Laguna is far off the beaten path. It is thankfully free of tourists compared to the rest of Laguna Beach, but for those of us who work, the drive takes almost as long as traveling from the office to San Clemente via the toll road.

Historically, real estate in South Laguna has been much cheaper than the rest of the town. Come the bubble, that difference more or less disappeared, and the asking price of most homes in South Laguna still reflect this bubble valuation.

Anyway, enough of the history, how about a comp in South Laguna's 3 Arch Bay? Let's get down to it and talk about 2 South Portola.

I think the takeaway here is that an older family home on the primo beach side of 3 Arch Bay sold for about $750 per square foot and that list prices should be viewed with healthy skepticism by buyers. 2 South Portola ended up selling for about 37% less than its original asking price of $3,250,000.

2 South Portola is a rather nice 5 bedroom/3 bath. Per the listing: "Traditional Three Arch Bay home with ocean and sunset views. Vaulted ceilings, fireplace, view deck, open floor plan and enclosed sun porch. The most wonderful and charming Lower Three Arch Bay home. Close to beautiful beach." You can view the MLS listing at here.

Original List price: $3,250,000
Listed: September, 2008 (yeah, about 1000 days or so on the market!)
Sold: May, 2011
Selling Price: $2,050,000
Selling Price/List: 63%

So, what kind of a rollback does this represent? 2 South Portola sold in May, 2005, for $2,500,000, so this most recent sale price represents, say, a mid or late 2003 price. If you are trying to value a property in Laguna Beach to determine how much to offer, try to figure out what it was worth in 2003 and you should be on the right track.

Buyers be careful out there. Lots of homes have wildly overpriced asking prices.

Home Robberies Shock Crystal Cove Residents

2011-05-04T00:19:00.000-07:00

The relative calm of Crystal Cove was shattered recently by two bold home robberies.

You know those imposing gates and guard shacks that drive the association dues toward $700 per month in Crystal Cove? Apparently, these amenities are of limited effect in keeping crime out.

Rumors are flying about the crimes and while it may be the talk of residents and at local real estate offices, no one apparently is eager to publicize this in the news because it could further depress Crystal Cove home values. The rumor is that two homes on Sidney Bay Drive were "cleaned out" by robbers using trucks. Virtually everything is said to have been taken. One of the homes was for sale. It is unknown if the other home was a vacation home or if the residents were simply away from their home. In Crystal Cove, many of the homes are vacant or used sparingly, so there are less neighbors who can report suspicious activities - apparently allowing the robbers to clean out entire homes, furniture and all, without being noticed. Fortunately, no one was hurt.

Comp Check - North Laguna Modern Luxury - $601 Per Square Foot

2011-04-10T17:26:00.000-07:00

Its often tough to sort through comparable sales data when you are trying to decide how much to offer on a home. Here's something that could be of help - 535 Dunnegan Drive recently sold for $601 per square foot. It is a high end, custom, 4 bedroom, 4000 square foot north Laguna Beach home - so it is a good benchmark.

You can see the entire listing for 535 Dunnegan here.

In the past month, it has become apparent that the high end market (over $1,000,000) in Laguna Beach is really dead. This means values will continue to go down. Look for the price per square foot to be in the $500's by summer - another 10% decline. Buyers who overpay are really asking for huge losses. Be careful out there.

January 2011 - California Home Price's Biggest Fall in 14 Months

2011-03-14T22:37:00.000-07:00

As you can read here in the Orange County Register, California home prices fell in January on a year-over-year basis for the fourth consecutive month, according to real estate tracker CoreLogic’s math. Certainly looks like we are firmly in a housing double dip. Buying a house now is buying a depreciating asset - one that loses money every month.

CoreLogic’s latest reports shows ..

The last time California prices were falling at a faster rate was 14 months earlier — November 2009, when year-to-year depreciation ran 4.78 percent.
National index declined on year-to-year basis for the sixth month in a row: off 5.7 percent vs. January 2010. Declined 4.7 percent in year ended in December.
Orange County? Prices down by 3.25 percent in year ended January 2011 vs. dip of 4.29 percent in previous month.

Mark Fleming, chief economist with CoreLogic, said, “A number of factors continue to dampen any recovery in the housing market. Negative equity, which limits the mobility of homeowners, weak demand and the overhang of shadow inventory all continue to exert downward pressure on housing prices. We are looking out for renewed demand in the coming months as the spring buying season gets underway to hopefully reduce the downward pressure.”

Coldwell Banker Fail - Coldwell Quietly Closes Office In Laguna Beach

2011-03-05T15:19:00.000-08:00

Coldwell Banker quietly closed its Laguna Beach Office on North PCH. This reflects the Laguna Beach home market, which is sinking as well.....Buying a high end home in Laguna Beach is buying something that will lose value, month in and month out for the foreseeable future.

CnnMoney - Housing Double Dip Near

2011-03-03T22:26:00.000-08:00

According to CnnMoney.com, the recent housing data indicates a coming double dip in home values. Not wise to buy a home right now if you can wait .......just sit back and let the market bring down those prices for you!

January Home Sale Data Shows Continued Weakness in Laguna Beach

2011-02-20T14:13:00.000-08:00

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.

Crystal Cove Sale Trend Points to Huge Declines By Summer 2011

2011-02-12T20:45:00.000-08:00

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.

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

2011-02-01T22:10:00.000-08:00

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.

Dataquick November Stats Show Double Dip - Home Market Sinking

2010-12-29T21:19:00.000-08:00

According to reputable real estate statistics company Dataquick, Southern California home sales fell in November to the second-lowest level for that month in 18 years, reflecting the weak economic recovery, a dormant new-home market and tight credit conditions. High end home sales are especially weak, but the median price paid for a home rose above a year earlier for the 12th consecutive month, though November’s gain was the tiniest yet. Buyers be careful out there - factor future home value declines into your offering prices!

OC Home Prices Falling - Double Dip Confirmed

2010-12-17T09:28:00.000-08:00

More evidence that Orange County home values are on the decline once again! This year’s price rally has faded, according to the OC Register. If you are a home buyer, keep in mind that you are buying a declining asset and you will lose value every month, on top of your mortgage payment. Renting is far superior at this point in time.

This data comes from CoreLogic, whose Orange County slice of its nationwide home price indexes shows local values falling at a 2.56% annual rate in October.
It was the second month of year-over-year declines following eight consecutive increases. Before that upswing, the CoreLogic index for Orange County had fallen 37 straight months on a year-over-year basis.

High End Listing Prices Too High - Increase in Price Reductions - OC Register

2010-12-04T20:51:00.000-08:00

Buyers, another reason not to trust those high end list prices in Orange County - most were way too high and are being reduced by a whopping 10% compared to last year. Yet high end home sales are still stagnant. This means that even the reduced list prices are far above the real market values of these homes. Buying a high end home entails a risk that you will pay way too much and be left holding the bag. Can you say "poof, there goes your downpayment?"
For more info see the OC Register here.

Forecast: Calif. home prices to drop 9.9%

2010-11-24T21:21:00.000-08:00

The OC register reports - Real estate trackers from FiServ and Moody’s Economy.com forecast that California home prices will fall 9.9% in the year ending in June 2011 — fourth biggest drop across the nation. Essentially, all meager gains from June 2009-2010 will evaporate......

Recent Sales Weigh on 26 Cruisers Bluff

2010-11-20T22:21:00.000-08:00

26 Cruisers Bluff, for sale at $5,300,000, is a White Sails model built by Taylor Woodrow in 2004. It has 4 bedrooms and is about 5000 square feet and has very nice ocean views. On a per square foot basis, it is priced at $1060 and this home last sold in mid-2008 for $5,175,000.

Two 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. 36 Gondoliers Bluff sold just 8 days later for $4,074,000.

Both of these recent sales were sold at prices of about $820 per square foot. You can draw your own conclusions.....
One last data point - 2 Gondoliers Bluff is a fantastic home, as shown by the photo below:

Laguna Letdown - Housing Prices Flat & Sales Sinking Marketwide - OC Register

2010-11-16T21:47:00.000-08:00

More details at the OC Register, but in short, the housing market continued to struggle against fierce headwinds last month, losing ground in the face of tightfisted lenders and edgy buyers.

The median price of an Orange County home – or price at the midpoint of all sales – fell to $438,000 last month, housing tracker MDA DataQuick reported Tuesday.

Last month's median price also fell $12,000 from the 2010 high of $450,000 reached in May and July. That means that all the price gains of the past year have virtually evaporated.

$2 Million+ Homes Not Selling In Laguna - OC Register

2010-11-11T22:53:00.000-08:00

It’s common to see homes for sale with prices well over $1 million in Laguna Beach, but is anyone buying those homes right now? Not really....
More on this from the OC Register is here.

Freshest Dataquick Sales Numbers Show Continued Home Value Slide

2010-11-01T20:47:00.000-07:00

The latest housing numbers for sales during the 22 day period ending October 8 have just been released and have been published by the OC Register.

The numbers show a continued plunge in Laguna Beach and Newport Coast. Corona Del Mar is slightly up year over year, but is unchanged from the September data i previously posted.

The highlights:
Laguna Beach:
only 32 homes sold, median price down 19.2% to $1,050,000.

Coronal Del Mar:
only 20 homes sold, median price up 3% to $1,498,000.

Newport Coast:
only 19 homes sold, median price down 8.1% to $1,540,000

Awesome Chart - What Year Have LA Home Values Rolled Back To?

2010-10-29T20:31:00.000-07:00

This chart was part of the Anderson Forecast presentation at UCLA. LA home values are at a level similar to that of January 2004.

One Seabourne Home May Sell - Another Seabourn Listing Fails in Crystal Cove

2010-10-28T23:35:00.000-07:00

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

Buyers Remorse Part IV - 16 Archipelago Sells for Less

2010-10-26T22:47:00.000-07:00

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????

After 3 years, Laguna Beach Mansion Sells for 2003 Price

2010-10-23T13:13:00.000-07:00

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.

Huge Monthly Losses for 2009 Buyers in Corona Del Mar, Laguna Beach and Newport Coast

2010-10-21T09:24:00.000-07:00

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.

Buyers Remorse Part III - Another Recent Crystal Cove Buyer Burned

2010-10-12T23:17:00.000-07:00

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.

5 Shoreline Comp Casts Major Doubt on Crystal Cove Home Values

2010-10-01T23:18:00.000-07:00

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.

A Buyer's 10 Second Guide to Bull$hit You May Hear From A Real Estate Agent (Part I)

2010-09-26T19:32:00.000-07:00

Below is real advice from a real estate agent on why it is a good time to buy. And I'm of course providing the reality as to why this is complete BS. If you are a buyer, you will hear such things every day. And it needs to stop.

Real Estate agent:
"Looks like you have conveniently "forgot" about all the sales in Crystal Cove with long time owners making some nice profits." (fill in any neighborhood for "Crystal Cove")

Thanks to the comments on this blog, we have no shortage of stupid comments from real estate agents. Problem is that some buyers actually believe this BS.

So, here is the reason why this real estate agent statement is BS: Whether or not to buy depends on the price of the home and what you think will happen to the value of the home in the next year, as compared to the price of renting. No doubt about this. You don't want to pay $3 million for something that will be worth $2 million only 12 months later. This is happening. Right now.

So, back to the stupid real estate agent comment. It just doesn't matter if the sellers have equity and are making "profits" or not. Say someone bought in 2000. Likely they would be able to sell for a profit even now so long as they didn't take out second and third mortgages. That doesn't mean YOU should buy. In fact, it has no logical connection whatsoever. There is no reasonable connection to the economic analysis a buyer must make. It truly is BS. By the way, the sunset is fantastic tonight. ;)

Glut of Seabourne Homes for Sale In Crystal Cove

2010-09-19T18:28:00.000-07:00

Looked this morning and there are now 8 "Seabourne" model homes for sale. In addition to the couple of Seabourne homes that have been listed for sale at one time or another for *** years ****, there are now 6 more. In my opinion, none of them are priced to sell and none have sold. The proof is in the pudding, as they say. Be careful buying - if any of the owners really wants to sell, I expect major price reductions.

Demand for OC Homes Plunges 27%

2010-09-07T08:48:00.000-07:00

A lackluster summer finishes up. Just in from the OC Register - the number of pending sales in the OC has dropped a whopping 27% since April, 2010.

The weakest segment of the market is homes priced above $1,000,000. This is a signal that price pressures in this segment will be downward this fall. This price point covers almost every single family home in Laguna Beach, Newport Beach and Newport Coast.

An 8% fall in the price of a $3,000,000 home over 12 months results in about a negative $20,000 per MONTH being added to your real costs of owning. Not something I would buy into right now.

"Coastal Expert" Real Estate Agent Lampooned on Local Discussion Board

2010-09-02T23:27:00.000-07:00

"Coastal Expert" real estate agent Hillary Caston has been flamed on the ocreader discussion board over her latest article that discusses a huge new government effort to rescue the OC real estate market.

Further investigation by Bluemove's crack team has revealed Ms. Caston hawking homes while dressed as a pirate. "Coastal Expert" indeed.

I guess it is time to buy!!! With all this government money coming, we should go back to the good old "pirate" days of 2006 home values in Laguna Beach!!

52 Sidney Bay Price Analysis - Makes sense to Rent, not to Own

2010-08-26T22:28:00.000-07:00

I have completed a rent versus buy analysis on 52 Sidney Bay Drive in Crystal Cove. Listed for sale at $2,895,000, this home recently rented for $6,000 per month.

The result? Renting wins hands down, costing $5,103 per month. Buying is a real disaster - it could cost $20,478 PER MONTH.

And this is a conservative estimate because it assumes only a 4.1% drop in the home's value over the next 12 months. If this drop in home value turns out to be in my opinion a more realistic 8%, then the cost of owning in the next year becomes a whopping $30,000 PER MONTH.

Of course, one interpretation of this analysis is that this home is hopelessly overpriced. And I agree with that.

Here's the backup data:

Rent		Own

Rent Payment	-$6,000	Mortgage Payment (20% down)	-$12,433
Monthly Return on Unspent Downpayment	$897	Principle	$2,800
Total Monthly Cost	-$5,103	Mort Tax Benefit	$2,040
		Insurance	-$200
		Maintenance	-$200
		Association Dues	-$615
		Property Taxes	-$3,016
		Prop Tax Tax Bene	$1,146
		Decline in home value	-$10,000
		Total Monthly Cost	-$20,478

Plunging Home Sales Could Sink Recovery

2010-08-24T22:20:00.000-07:00

A recent analysis by CNNMoney.com shows that a double dip in housing prices is coming. Existing home sales sank 27.2% in July, twice as much as analysts expected. This is the lowest level since 1995.

What does this mean for Newport Beach and Laguna Beach home sales? More pain - high end home values will fall faster and have more room to fall than the lower end of the market. A new owner of a high end home likely will hemorrhage money because of a decreasing home value, every month, month in and month out. Of course, you won't hear this from a real estate agent who is trying to sell you a house.

"Home sales were eye-wateringly weak in July," said economist Paul Dales of Capital Economics. "It is becoming abundantly clear that the housing market is undermining the already faltering wider economic recovery. With an increasingly inevitable double-dip in housing prices yet to come, things could get a lot worse."

It remains to be seen how the sale prospects of existing listings in such places as Crystal Cove will be impacted. Keep an eye on these listings:
5 Atlantis Cove
9 Atlantis Cove
52 Sidney Bay Drive
28 Tideline Bluff

Renting Makes Sense in the High End

2010-08-20T23:01:00.000-07:00

I'll say it now. The new American dream at present is renting. And there is nothing wrong with that!
This is driven by the high cost of owning. In the high end, why in the world would anyone buy when they can rent a high end home for close to half the cost of owning. Not everyone can play this angle of course. But the real cost of renting a home that would cost about $6,800 a month to own is roughly $4,000 per month. This assumes of course that the value of the home is flat which is realistic for at least the next 2 years. This also assumes that you don't spend your huge downpayment and it is earning 3% interest or dividend income and that you are in the 40% tax bracket.

It gets really interesting if you then factor in decreasing home values in the high end. This is reality and the homeowner really takes it in the shorts. A $600,000 decline in the home's value in one year is $50,000 per MONTH in losses for the owner. But not the renter. I'm so glad the owner is subsidizing my lifestyle while I live in his deluxe OC beach-close home! I'll enjoy it while it lasts! Then I'll buy.

Laguna Beach Sales Numbers Drop at Height of Summer Selling Season

2010-08-09T21:46:00.000-07:00

Not a good sign for the real estate market in Laguna Beach.
The number of home sales in Laguna Beach is down 19.4% for the 22 business days ending July 21 based on DataQuick’s freshest stats. Normally, sales pick up in the summer. Not this summer. And a long winter is around the corner.
The chart in the OC Register is here.

Median Laguna Beach Single Family Home Price Bounces Back in June

2010-08-04T06:01:00.000-07:00

The June numbers are in and the median single family home price has improved from May. According to Dataquick, the median price for a single family home in Laguna Beach in June is $1,288,000 as compared to $985,000 in May. As compared to June 2009, the median price is up about 2%, which is flat. Summer is the big home selling season so more houses naturally sell at this time.

What does this mean? Some higher end homes in Laguna Beach are selling. But only some. Most of the homes I am tracking have not sold and the price reductions continue. It remains to be seen what happens after the summer selling season. The downward trend in the high end could continue, slowing sinking the value of the homes bought in the summer. Be careful if you are buying - factor this into any offers you make.

Real estate agents are, of course, welcome to comment in a meaningful fashion.

5 Atlantis Cove Listing Has High Aspirations

2010-07-30T10:12:00.001-07:00

5 Atlantis Cove in Crystal Cove was recently listed by Jane Polley for $3,195,000. Considering that two Seabourne type homes were listed and failed to sell at $2,995,000 or so, I'd say this listing is rather ambitious. Another Seabourne model without a view sold a while ago for $2,200,000 and in my opinion would sell for less today.

5 Atlantis Cove does not have the best ocean view because it mostly faces a gully, not the ocean. According to the property records, a notice of default for a huge loan on another property was mailed to this home in May. The listing also omits the square footage - I wonder if this is a way to avoid the question of what Seabourne models have been selling or listing for on a per square foot basis?

All in all, in my opinion, I'm all in on this one for $2,100,000!

Unrealistic Sellers Flood OC's Home Market

2010-07-12T21:39:00.000-07:00

The OC Register confirms that sellers have flooded the OC home market with homes that are priced unrealistically high. Buyers purchasing in the high end may end up paying too much. Way too much.

Local Real Estate Consultant Says Use 2003 Sale Prices to Determine Home Prices Today

2010-07-04T10:57:00.000-07:00

Interesting post on Lansner's blog:

We believe 2003 prices are a reasonable estimate for most home values today. Obviously, this is a very back-of-the-envelope analysis and our work with clients is more targeted toward the decisions they are trying to make.

Many many homes in Laguna Beach and Newport Beach are listed at prices way over 2003 levels. Buyers need to be careful to avoid drastically overpaying for a home.

Median Laguna Beach Single Family Home Price Plunges to New Low In May

2010-06-23T21:48:00.000-07:00

The May numbers are in and the median prices is still plunging downward. According to Dataquick, the median price for a single family home in Laguna Beach in May declined to $985,000. This is the first time I have seen it below $1,000,000.

What does this mean? The high end in Laguna Beach is still weak. The value of these homes is going down or are not selling and this is pushing the median price downward. The trend is down. Be careful if you are buying - factor this into any offers you make.

Real estate agents are, of course, welcome to comment.

Buyers Remorse in Top of World Part II

2010-06-08T22:39:00.000-07:00

We've written about the sale of a home on Park Place and how the sale price of $1.62 million didn't compare favorably to some local homes that recently sold.

Well, hold on to your hats for what in my opinion could be a real estate disaster in the making, but first a little information on the Park Place neighborhood.

Park Place is a street of older homes in the family friendly Top of the World neighborhood in Laguna Beach. The homes were built in the 1980's and are well kept, but are hardly custom high end homes. Park Place is like a little slice of 1980's Irvine. If you are a higher end purchaser, this neighborhood will be disappointing. I'm not saying that is bad - I'm just sayin what's what.

Anyhow, back to the home on Park Place. We had earlier wondered why the buyer had paid so much for this home, given the low priced comps that were located very close by. Now, the buyer has put up the poles and ribbons that indicate a complete remodel. OMG, the buyer is putting MORE money into this home just like in the go go days of 2007!

Now, another close house on Park Place is for sale for $1.59 million. No big deal, right? Well, that home is 700 square feet bigger AND IT HAS A POOL. And it may not even sell for the listing price. So that home on Park Place is being offered at $457 per square foot. If you value the home sold on Park Place at that price, it is worth, gulp, only $1.295 million. And it doesn't have a pool. Subtract $100,000 for that, leaving you with a value of $1.195 million.

The buyer of the Park Place home took out a loan of $1,200,000 and therefore made a downpayment of $420,000. What happened to the value of the downpayment? Well, it's probably gone. Gone in 2 months. Close escrow on the house in April, gone in June. Be carefule and do your homework before you buy folks!!!!!

Oh yeah, the real estate agents have their commission payments.

Crystal Cove Listing Fail

2010-05-23T22:23:00.000-07:00

Recently, 12 Baffin Bay was listed for $2,995,000. Several open houses were held. Much gushing about the extra rooms in this home, which was renovated to add square footage. This was touted as a "GREAT VALUE IN CRYSTAL COVE" Hah. Right.

No sale. Fail. Now being rented out.

What does this mean? This is more evidence of weakness in Crystal Cove. This especially demonstrates the falling home values in the "Seabourne" models on the lower part of the hill. They are all pretty much the same - interchangeable comps. If the listing price was somewhere close to the real market value of this home, it would have sold.

Someone could conclude then that the value of this home is much less than $2.9 million. $2.5 million? $2.4 million? The real value of these single family homes is probably lower than the high priced condo sale that happened earlier in the year. Ooops - wouldn't want to be that buyer. Any thoughts out there?

Laguna Beach Foreclosures Skyrocket - More Downward Price Pressure Coming

2010-05-07T22:20:00.000-07:00

The latest data from the OC Register shows a whopping 66% increase in Laguna Beach foreclosures. This means more distressed properties will hit the market. This means downward price pressure. If you buy, buy low so you don't end up underwater on the day you close!

Top of the World - Large Homes Sell at Less Than $400 Per Square Foot

2010-05-02T09:22:00.001-07:00

Recent comps in the Laguna Beach Top of the World neighborhood indicate that the price per square foot for these larger family homes has dropped way below $400 per square foot.

3216 Tyrol - $358 sq/ft, sold on February 26, 2010
2556 Temple Hills Drive - $389 sq/ft, sold on April 16, 2010.
2255 Bridge Road - $358 sq/ft, sold on January 8, 2010.

Notably, only a few houses away from 3216 Tyrol is the above home on Park Place, which sold on April 9 for a whopping $571 sq/ft, a total of $1,620,000. There is virtually no difference in the non-ocean views between these two homes. If the Park Place home was valued even at $400 sq/ft, the price would have been $1,140,000. If that valuation is used, it is almost a $500,000 loss the very second the buyer took title to the house. Possibly, they are upside down right now, even before the housewarming party. I wonder if the new buyers were aware of these recent comps? They paid more than the house sold for in 2004, which can be used to judge value. LOL if they have to resell anytime in the coming years!

1130 Summit Drive - A New Low Comp Killer For Laguna Beach Luxury Housing

2010-03-21T17:34:00.001-07:00

I've written about 1130 Summit Drive before. It is a newer modern house with ocean views but no ocean access. A rumor posted by a reader on this blog indicate that it has been sold for $2.38 million. If true, this represents a huge reduction from its original list price, which was $5,000,000 in 2007. According to the prior link, it was Lee Ann Canaday trying to get that price from someone. Didn't work.

The sale price would be more than a 50% reduction from the $5,000,000 price that turned out to be completely unrealistic.

All in all, once the sale is confirmed, this will be a comp for Laguna Beach at $496 per square foot. There are a lot of houses out there priced way above that at $700 or $800 or $1000 per square foot. I'd advise a healthy dose of caution when dealing with listing agents claiming homes can be valued at these prices, especially homes with views, but no ocean access. I personally think the buyer paid a little too much, but everyone has their own way to value things.

Foreclosure Activity Keeps Surging in Crystal Cove

2010-03-12T21:57:00.000-08:00

Time for an update on foreclosure activity in Crystal Cove. Like anywhere else, a spike in foreclosure activity is likely to precede a drastic drop in home prices.

And the Crystal Cove foreclosure activity is UP since I last checked.

The foreclosure activity includes recorded notices of default, trustees auctions and then the resulting properties are "bank owned."

About twelve months ago, there was only one property in crystal cove that had foreclosure activity. About six months ago or so there were five properties involved in foreclosure. The twelve. And as of today, there are thirteen, according to Realtytrac.com. This pretty much proves out what I've seen with the homes in Crystal Cove - homes can't be sold for the debt they carry and home values are dropping fast. Homes that are priced high are just sitting there with a few exceptions...... Some listings have drastically reduced listing prices as some owners have determined that it is better to get the home value now rather than lose more in the coming months.

How many of those "good" real estate agents have told our readers about this spike in foreclosure activity in Crystal Cove? Or do you see agents citing the same old and tired statistics. Be careful out there......

LA Times - High End Owners Forced to Drop Prices

2010-03-04T20:47:00.001-08:00

Good article on high end homeowners testing the market, then having to make huge cuts to their asking prices. Testing the market? Is that like a hunt for the rare moron who will drastically overpay for a house? I'd say there are a lot of owners "testing the market" in Crystal Cove, Neport and Laguna Beach.

$358 Per Square Foot in Top of World - Bluemove's Value Prediction on 3216 Tyrol Comes to Pass - It sells for about 50% of the original list price

2010-02-27T12:09:00.000-08:00

I've previously written last July about the value of 3216 Tyrol, which at one time was listed for sale at $3.2 or $3.4 million, and more recently listed for about $2 million. I said at the time, i'd pay 20%-30% less, given that the home was purchased in 2007 for $2M, back when values were a lot higher. My inescapable conclusion? The home in my opinion was worth to me much less than $2 million.

Well, it just sold for $1,685,000.
This is why I do not trust whatsoever the original listing prices for some of the homes for sale in Laguna Beach as being representative of what I should pay for a home.

This sets a comp price point of $358 per square foot for homes in the Top of the World Neighborhood. This is yet another decline. You probably won't hear about this from your agent. Until you ask.

Buyers Remorse Part III, More Recent Buyers in Crystal Cove Lose Big Just After Escrow Closes

2010-02-16T20:04:00.001-08:00

We have been documenting the crash in Cyrstal Cove home prices.
More recent buyers have been burned - and their homes fell steeply in value only months after the close of escrow, if not on the very day escrow closed. This blog has warned buyers to be careful with plunging Crystal Cove real estate values. Buying a home in Crystal Cove is sort of like buying a new car - you leave the lot and you've lost a healthy chunk of what you paid.

Case in point - The buyer of 124 Sidney Bay Drive, bought last June, has probably lost well over $500,000 of value after only about 4 months of ownership. And things are not getting better.
The home was bought for $2,650,000. This is $684 per square foot. The buyers agent identified by Redfin.com, is Rick Langevin of Surterre Properties Inc. Read on for some nearby sales.

The homes on Sidney Bay Drive are largely the same kind of Tuscan stucco boxes, but I've adjusted the selling price for the differences in square footage.

Only 4 months later, 100 Sidney Bay Drive sold in October 2009 for $1,900,000. This is $491 per square foot.

Then 1 month after that, 106 Sidney Bay Drive sold in November 2009 for $1,652,000! This is $561 per square foot. Likely they never knew about the comp at 100 Sidney Bay drive because i sold only a few weeks before. Some may conclude that they paid $60 per square foot too much....

Factor all of this in and the 124 Sidney Bay property is worth a lot less based on these recent sales.

Be careful out there.......

Accurate Forecaster Warns - Don't Buy - High End Homes Such as Those in Newport and Laguna Beach Will Continue to Fall Through End of 2010

2010-02-14T23:16:00.000-08:00

I recently had the pleasure of attending a presentation of Dr Esmael Adibi, who has a track record second to none at predicting the OC housing market. His presentation was very credible - he reviewed his predictions from last year and they have come to pass. His message? DO NOT BUY a home in places like Newport Beach or Laguna Beach until at least the end of 2010. He said that such high end value areas will continue to fall in value. For a median price house in cheaper neighborhoods, Adibi said it is OK to buy now.

My take is that buying a home in Newport Beach or Laguna Beach is just like buying a car - drive it off the lot and take a huge hit in value. Closing escrow is just like driving off the car lot - buy a house in these beach towns and close escrow and LOSE a ton of money from the value decline during the escrow period. And for these hapless new owners, more losses are coming, with every passing day. Of course, real estate agents get paid on the day escrow closes, so they have absolutely no interest in what happens after that - you're on your own if you are a buyer!

Esmael Adibi is director of Chapman University’s Anderson Center for Economic Research. He has a stunningly accurate track record on predicting the housing market. He was early with a prediction that the O.C. housing market was in for a fall.

I'm standing by watching the Laguna Beach, Newport Beach and Crystal Cove home prices decline...........

Sale of Repo at 1130 Summit Drive Fails - it Falls Out of Escrow

2010-01-05T22:10:00.001-08:00

We've written about 1130 Summit Drive, which supposedly (according to comments posted on this blog) garnered offers in the neighborhood of $2 million and perhaps one offer with a higher amount that was chosen to go into escrow.

Well, so much for that - the home presumably fell out of escrow and was relisted at the end of December and the price was reduced by about $35,000, to $2.37 million.

Does anyone know what happened? Problems with the buyer? Cold feet? Something wrong with the house?

At a minimum, this price reduction may impact the home in escrow next door at 1289 La Mirada Street. This older home in need of updating is one lot up the hill but on a better, flat street, but now it may be worth less than its lofty listing price of nearly $2 million, given that the 1130 Summit Drive house is moving downward in the direction of that price. They are virtually the same square footage Both of these homes are in Arch Beach Heights area of Laguna Beach, which is one of the less desirable areas in Laguna Beach and is not known as an area packed with really expensive homes. I wonder if the La Mirada buyer will get cold feet.

The listing broker for both homes is the same - Prudential California Realty. I wonder if this broker will tell the buyer of the La Mirada home about the failed sale of the neighboring house? Or will the buyer's agent be smart enough to find out about it? This failed sale may provide a very relevant comp data point for the La Mirada house. And that comp data point has fallen in value judging from the recent price reductoin......tick, tick, tick.....will another price reduction come? Probably..........

Newport Beach, Laguna Beach, CDM and Newport Coast Lead County in Price Reductions

2009-12-14T21:38:00.000-08:00

John Lansner's blog has a good posting identifying the communities with the greatest price reductions on MLS. Newport Beach is number 1, with the greatest price reductions and Corona Del Mar, Laguna Beach and Newport Coast are all right up there. What does this mean? It means that real estate agents in these areas generally are listing properties at unrealistic asking prices. If no one shows up to pay the initial asking price, the market is forcing price reductions. Buyers should beware of asking prices given this hard data - the true value of these properties is likely to be far, far below the asking price.

1130 Summit Drive - Good Deal or Not?

2009-12-03T21:00:00.000-08:00

Recently, 1130 Summit Drive was foreclosed upon and listed by its new bank owner. It is big, w/5 bedrooms, very nice inside, but no yard, on a very busy steep street and the house is all vertical - 4 stories up to the kitchen from the garage.

The bank wants $2.4 million - that's quite a steep price for a home in Arch Beach Heights, which is typically a low value area in Laguna Beach. Rumor has it that there were multiple offers a few weeks ago but even then the price didn't go that high. Now though, it looks like the house is under contract.

Oh yeah, the neighbor's house (1289 La Mirada St.), which is bigger and is uphill on a better and level street, was recently listed for $500,000 less. Not a good sign that 1130 Summit is worth anything near to the asking price, in my opinion.

What say ye? Is someone going to get a good deal or is the new buyer getting a load of trouble - a house that's going to sink underwater yet again in the future?

Dataquick October Numbers - Houses Above $2M in Laguna Overpriced

2009-11-23T21:41:00.000-08:00

The October dataquick numbers are in and the median price is flat for Laguna Beach, compared to recent months.
The median single family home price in Laguna for October was $1.195 million, but this is down a whopping 36.4% from October, 2008.

The interesting thing is that while the median price has been flat in the recent months, the economy and the lack of good financing is just killing the homes priced above the median, for which one would borrow more than the current $729,000 conforming jumbo limit. Specifically, sales of homes above $2,000,000 have been frittering away to nothing as the year has progressed. No sales of these homes in October. None at all. This means that homes in Laguna Beach that are listed for above $2 million are SEVERELY OVERPRICED.

I wouldn't want to be a buyer of one of these homes earlier in the year - If I was, I would be listening to my home value deflating below the purchase price. sinking underwater......

Values Continue Crash in Crystal Cove - Buyers Remorse Part II

2009-10-06T22:48:00.000-07:00

In an earlier post I wrote about the decision of a recent buyer of 18 Rockshore Bluff to pay $4.4 million. The value of this home was questionable, I thought. If it is that obvious, I wonder what kind of advice the buyer's agent gave to the buyer who was forking over $4.4 million.

Well, hold on to your hats. And hold on to your loan docs, Bank of America, for the $3 million mortgage that you wrote on 18 Rockshore. It is worth much less now, only months later.

2 Rockshore Bluff recently sold. For about $2.6 million. Practically identical house. Same 3800 square feet. Same killer view. The photo is from 2 Rockshore.

Let me get out my calculator. $4.4 - $2.6 = $1.8 million dollar loss in less than six months.
The B of A loan on 18 Rockshore? Already underwater. The buyer? Underwater. The agents involved? My guess is that they are laughing all the way to the bank.

Crystal Cove home values are going down big time. And there are many overpriced listings. Do the due diligence and research. Be careful out there.....

Coldwell Banker's MLS Listed Cartoon House Foreclosed Upon

2009-09-08T20:58:00.000-07:00

I've written about the 940 Hillcrest cartoon house for a while now - how it was a Coldwell Banker listing priced at (hold your laughter) $2,800,000. The original MLS listing didn't even have a picture of the house, it had a nice fancy cartoon drawn house drawn over the present house.

This was the ultimate bubble listing. It wasn't about the house that existed in REALITY - instead the brokerage wanted everyone to buy into a fantasy cartoon house that only existed in the MLS. After all, that's where the value is - in pretend homes. Gee, thanks, Coldwell Banker.

Well, the sales tactics didn't work and its all over now. According to the new MLS listing that hit the system today, the property is now bank owned and priced at $937,800, roughly 66% less than Coldwell Banker's original price. I'm really happy for the buyers out there who didn't fall prey to the original list price.

Next time you see a Coldwell Banker listing, think of this one - how much do you really trust these people to present a property with a fair market price? I'll let the commenters answer that one.

Crystal Cove Home Values Continue Downward Plunge

2009-08-19T23:41:00.000-07:00

During the bubble, many realtors lured buyers of Crystal Cove homes for $1000 per square foot. That price point was thought to be a rock solid value even well after the market started plunging downward.

Not so anymore. Awash in foreclosures, the asking prices on some Crystal Cove properties are squarely in the $600 per square foot range.

And the sale prices probably will be less than the asking prices.

Hello, $500 per square foot! A 50% decline. And more declines will come after the summer buying season fizzles to a close. Your agent won't tell you that, but I will.

Here are some of the properties:

1. 24 Sidra Cove; asking $665 sq/ft
2. 106 Sidney Bay Drive; Asking $690 sq/ft
3. 11 Secret Cove; Asking $746 sq/ft
4. 100 Sidney Bay Drive; Asking $616 sq/ft
5. 5 Secret Cove; Asking $574 sq/ft

UPDATE: All the above homes either sold in the $400 or $500 per square foot price area or didn't sell at all. (Dec. 2010)

3216 Tyrol - Pricing difficulties up in Top of World

2009-07-24T21:31:00.000-07:00

I noticed 3216 Tyrol in the MLS - it is a house with Irvine views (no ocean) up in the Top of the World neighborhood. I like this neighborhood because it seems to be family friendly and is flat. The Tyrol house has been for sale since 2007 at various prices, I think from above $3,000,000 to just below $2,000,000. Just like many other Laguna Beach home prices, this one should be treated with a lot of caution.

It is hidden pretty well in the online listings, but this home's prior sale price was about $2,000,000 in 2006 - a prime bubble year. Notably, the home's owners appear to be real estate agents and I wonder how the prior sale data has been kept out of the MLS (redfin) and Zillow databases? Suspicious. Now that home values in Laguna Beach have retreated, in my opinion, to 2003 or so, this home's asking price is WAY overstated. I'd take 20%-30% off of the $2,000,000 prior sale price to arrive at today's value. I don't think this attempted home flip is going to work very well for the owners.

I've been in the house and it has great Irvine (meaning everything that is non-ocean for miles and miles) views, but its a duplex - the interior is chopped up and it just feels like a small house. The kitchen is small for an expensive house and there is a narrow, one bedroom unit on the first floor that isn't really usable for much other than renting. On the other hand it has great deck space, a huge garage, but no pool.

Update: This home has been withdrawn from the market.
Thoughts?

LA Times: High End Home Values Continue To Fall

2009-07-20T22:46:00.000-07:00

This blog is about single family homes in Laguna and Newport. No matter what shape or size, they are all high end compared to the OC average home prices. In a recent article the LA times analyzed Dataquick's June statistics and the news on high end homes was not pretty:

"Although prices have firmed at the low end of the market, they are still falling in affluent communities, the home sales data released by MDA DataQuick on Wednesday show.

The high-end market did not suffer the rapid shock of subprime mortgage defaults and foreclosures that hammered the housing market's lower end. Sales stagnated as wealthier sellers held out for higher prices.

Now, however, some sellers "are realizing the market's not going to just bounce back" and are starting to sell homes for less than they had recently hoped to get."

Chapman Forecast - High End Home Prices Will Continue to Fall Well into 2010

2009-07-04T10:31:00.000-07:00

Mr Blue's focus is on Newport Coast and Laguna Beach - properties well above the OC median price you generally read about in the media. The most recent data indicates that prices on Newport Coast and Laguna Beach homes most certainly will continue to fall almost all the way to 2011. Of course, the OC median price you may hear realtors talking about doesn't mean anything in Newport Coast or Laguna Beach, which are in the upper segment of home prices. The upper end prices have taken longer to start their plunge downward. Now that plunge is happening, as high end sellers cannot hold out forever with the hope of selling at a 2007 peak price.

The highest local authority in real estate in the OC is Chapman University's forecast, operated by Dr. Adibi. Just released, it says "Although our forecast suggests a bottoming out for median home prices, high-priced homes are still subject to further price erosions." If you buy, get a price that is below the present value of the home so you have a cushion to ride out the coming decline. That way you won't be upside down after owning for only a year. Good luck house hunting......

False Perceptions of a Turn Around

2009-06-30T23:20:00.000-07:00

My favorite industry analyst, Ivy Zelman, has a good article in Builder magazine detailing the state of the market. Ivy basically says that there are some superficial indications of a bottom but that things will get worse.

Buyer's Remorse in Crystal Cove?

2009-06-26T22:53:00.001-07:00

More data from Crystal Cove - 18 Rockshore just sold for $4.42 million after being listed for about $5 million. 18 Rockshore is a 3800 square foot, 5 bedroom home. Also, 16 Wharfside (3500 square feet, 6 bedrooms) sold in May for $3.1 million. A similar home at 7 Atlantis Cove sold in January for $3.2 million. All of these sold for hundreds of thousands less (or almost a million less) than the listing prices.

Time will tell and I'll certainly not wish anything bad on anyone, but in my opinion, these homes will take significant value hits as we go toward December, based on present trends. There are already Crystal Cove list prices in the low 3 millions that are poised to drop into the two million range and one home (20 Surfspray) up there by Rockshore is already listed in the mid 2 millions.

If I owned 18 Rockshore, I'd be needing "upside down" therapy right now. Not a good thing to need after just closing escrow. Any opinions about these values out there?

Crystal Cove Awash in Foreclosures

2009-06-21T22:52:00.000-07:00

I've been househunting in Crystal Cove for a while now and I have also been carefully watching the foreclosure activity. Like anywhere else, a spike in foreclosure activity is likely to precede a drastic drop in home prices. The foreclosure activity includes recorded notices of default, trustees auctions and then the resulting properties are "bank owned."

Six months ago, there was only one property in crystal cove that had foreclosure activity. Three months ago or so there were five properties involved in foreclosure. And as of today, there are twelve, according to Realtytrac.com. This pretty much proves out what I've seen with the homes in Crystal Cove - home values are dropping fast. Homes that are priced high are just sitting there...... Some listings have drastically reduced listing prices as some owners have determined that it is better to get the home value now rather than lose more in the coming months.

How many of those "good" real estate agents have told our readers about this spike in foreclosure activity in Crystal Cove? If yours has, hang on to them - they really are paying attention to value indicators......

What Your Agent Won't Tell You About That Home You Want To Buy

2009-06-11T20:54:00.000-07:00

Buying a home is not something people do very often. For this reason, most people rely on their buyer's agent for good advice.

Problem is - most agents will hide negative information from their clients because the agent wants that commission and wants it fast.

Take the Laguna Beach home market for example. Thanks to our friends at Trulia, the direction of home prices in Laguna Beach is readily apparent. Down. Down. Down. Down. Down.

The Trulia chart, with the red trend line I added, shows an amazing decline in median home prices in Laguna Beach. The decline shows no sign of stopping. The decline HAS NOT STOPPED.

You'd think every agent in town would be saying "If you buy, you should know you are buying a DECLINING asset. You know, like a car?" But, I'm guessing you have NEVER heard that from an agent. Right. I have only heard one agent even hint at this, and I know A LOT of agents. My conclusion is that greedy Agents are hiding important facts from buyers.

More likely, you've heard many agents say "Buying a home is a long term investment." These are the real estate agent code words for "You will lose money, and lose money quickly, but I won't tell you that."

Am I wrong? Or right?

Laguna Beach Slammed by Unemployment Spike

2009-06-03T00:21:00.000-07:00

According to a recent OC Register story, Laguna Beach unemployment has swelled to nearly 6.3%.
This is an increase of about 700% since 1999. Downward pull on the normal single family home values in Laguna Beach? Yes. Middle class people caught in the unemployment wave? Yes.

Laguna Beach Median Home Price Tanks in April

2009-05-30T22:40:00.000-07:00

The April dataquick numbers are in and things are still tanking for Laguna Beach home prices.
The median single family home price in Laguna for April was $1.16 million, down a whopping 31%.
May and June should pick up a little given it is the summer buying season.
The economy and the lack of good financing is just killing the homes priced above the median, for which one would borrow more than the current $729,000 conforming jumbo limit. This pressure will continue past any little summer jump and things will slide further as we go toward December.
If you put in an offer, make sure the offer price is low enough so that you don't end up holding the bag for these future losses.

Cartoon House - Now Asking $1.2M - Down 57%

2009-05-25T21:47:00.000-07:00

In December 2007, I identified this listing as ridiculously overpriced at $2,800,000.
Nailed this one. At 940 Hillcrest in Laguna Beach, it hasn't sold and is now listed at $1,200,000, a whopping 57% reduction in asking price. Of course, that is still a lot for a CARTOON HOUSE.
Presumably, this property is being sold for the value of the lot. Nonetheless, I think the term CARTOON HOUSE fits in just fine with the snake oil most Laguna Beach and Newport Beach real estate agents are selling.

Barton Rollert of Coldwell Banker has this listing. Rollert's credibility is scraping bottom since the past listing for this property asked for $2,800,000, and obviously this was way, way off the real value.

Barton, can I buy your CARTOON HOUSE with CARTOON MONEY?

This shows how much trouble a buyer could get into by giving any weight whatsoever to a Coldwell Banker list price. If someone would have paid $2,800,000, or anything close, we now know that the buyer would have been stuck with at least a $1,600,000 loss based on the present list price.....

Laguna and Corona Del Mar Home Prices Crash to New Low

2009-04-24T21:40:00.000-07:00

The show keeps going folks. Despite the typical "our town is immune" cheerleading from most local real estate agents, the Laguna Beach median home price slid to $1.14 million in March, down 30% since last year. The average Laguna Beach homeowner has lost about $30,000 per MONTH in net worth from home value decrease during the last year.

Glad I'm still renting while I'm in house hunting mode. My landlord could repave a mile of PCH with the dollar bills he loses in home value in only one month. Oh, yeah, while that bleeding goes on, I get to live in his fabulous house! Sounds like the new version of the American dream!

The "immunity" has turned into the full blown plague. Don't catch it!

Bye Bye 2626 Victoria Drive

2009-04-05T15:38:00.000-07:00

We've watched as 2626 Victoria Drive has gone from an outrageously over-priced listing to a complete disaster for the owner, via a failed auction organized by local realtor John Stanaland of First Team Estates. Now the posted data shows that the property will be auctioned in foreclosure next week. Perhaps the banks will price it closer to the $1,500,000 the property could have fetched at the failed auction back in November, 2008. No one is immune to the drastic drop in Laguna Beach home prices.

Laguna Sales Crater - Laguna Beach Has 6.25 Years of Real Estate Inventory

2009-03-17T23:58:00.000-07:00

Based on the latest dataquick reports (6 properties sold in Feburary), Laguna Beach has a huge inventory of homes for sale that would take over 6 YEARS to sell. (Redfin indicates 442 properties are on the market right now)

What does this indicate? More huge price corrections to the downside for Laguna Beach home prices. When nothing is selling, sellers must reduce prices or not sell. No one can fight the market direction. Buying a home now at the typical high asking price would be a stupid, catastrophic decision.

Honey, the neighbors undercut us by $500,000!

2009-03-08T23:07:00.000-07:00

I've been following Crystal Cove home prices closely. There are some very disappointed home sellers in Crystal Cove. This probably goes under the category of "the market giveth and the market taketh away." Crystal Cove homes appreciated hugely in the bubble years.

Now is the time for the home values to give it up.

Take 2 Tideline Bluff, for example. Originally listed for $4.5 million, it has been reduced to $3.6 million. This about half way up the hill in Crystal Cove, where homes have been listed in the 4-5 million dollar range. Now, the price cut on 2 Tideline Bluff and the listing price on other homes have made it clear that the $4 million dollar days are gone for good.

Just down the street is 20 Tideline Bluff, listed at $4.8 million. This one is, well, pretty clearly over valued in view of this development. Yet Coldwell Banker is still trying to sell it at this price. What does that say for Coldwell's credibility? Thoughts anyone?

It should be appreciated that the neighbor's price cut really does nothing other than demonstrate that the true market values for these homes have gone down. If the values are down, they are down, no matter what the various asking prices. If either home were worth 4 million dollars, then someone would step up and pay it. Not going to happen because in reality the homes are not worth it.....

Ocean Views - $315 sq/ft in Arch Beach Heights!

2009-03-06T22:08:00.001-08:00

I recently noticed that the house at 1420 Del Mar sold for only $832,500, about 50% of the original asking price. It is a 4 bedroom, 2640 square foot home with ocean views. I toured it a while ago.

That works out to $315 per square foot. This is about what Arch Beach homes were selling for in 2002 or 2001.

This is a price point that will attract buyers in Laguna Beach, yet there are plenty of sellers out there who are asking much more, hoping for an ill informed buyer to happen along and get suckered.

Luckily, no buyer gave any credibility whatsoever to the original $1.6 million asking price, as listed by Keller Williams realty. Sorry Keller, no morons bought your perception of "value".....

January Home Sale Prices Crater in Laguna

2009-03-04T23:35:00.000-08:00

My prior post on January Laguna Beach home prices was based only on data through January 15.

Well, the last two weeks of January were ***MUCH**** worse.

When all the January numbers from Dataquick were in, the median home price in Laguna Beach was down to $825,000, a whopping 50% decrease over last year. This is single family home data only, and does not include condos.

You know that this means.

No one who is sane is buying any of the overpriced homes on the Laguna Beach MLS. The few sales that did happen? I chalk that up to the "moron" factor - ill informed buyers who have made catastrophic buying decisions.

There has been a drastic step change downward in the true home values in Laguna Beach. The median home prices in Corona Del Mar, Newport and Newport Coast also dropped like lead balloons.

Are there any agents out there who disagree? Sellers? Buyers?

January Sales Numbers Show Huge Price Declines in Laguna, Corona Del Mar and Newport Coast

2009-02-07T00:04:00.000-08:00

The "immune" cities are not immune. Price have rolled over and are screaming downward. Lansner's blog has posted Dataquick numbers through January 15.

Laguna Beach median home price - down 23% to $1.176M
Corona Del Mar median home price - down a whopping 50% to $1.25M
Newport Coast median home price - down a whopping 57% to $1.88M

Buying anything but the cheapest condo in these cities carries with it a ton of down side risk. Losing $20,000 to $40,000 per month in home value is one realistic scenario. Any real estate agents out there with any comments? If you go to an open house this weekend, throw these numbers around for mild amusement!

Home Values Plummet in Supposedly "Immune" High End Cities

2009-02-02T23:26:00.000-08:00

Recent data shows that home values in SoCal's high end communities only recently began dropping. But the drops are huge. The LA Times has a good article about it. One couple lost $400,000 in only a few months. Laguna beach home prices and Newport Beach home prices are following suit. Uninformed buyers are really at risk. Pound your agent for comps and analyze everything out there before you make an offer. Take the comps and SUBTRACT for the declining market to get to your offer price.

Chapman Forecaster Warns - Buying a High End OC Home Is A Mistake

2009-01-28T23:47:00.001-08:00

Esmael Adibi is director of Chapman University’s Anderson Center for Economic Research. He has a stunningly accurate track record on predicting the housing market. He was early with a prediction that the O.C. housing market was in for a fall.

I had the pleasure of recently attending a meeting where Adibi was presenting. His presentation was very credible and based on sound analysis. His message? DO NOT BUY a higher end home in OC. These homes will fall a lot in the coming years. For a median price house, Adibi said to buy toward the end of 2009.

I'm standing by watching the Laguna beach home prices decline...........

South Laguna Comp - Big House, Big Lot - $500/sq. ft.

2009-01-12T23:11:00.000-08:00

31401 Holly Street finally sold for $1,865,000. This is about a MILLION dollars less than the original listing price. When I was in the property at a time close to the original listing, I told the agent that the thing wrong with the price was .... the "2". As in it should sell for a price of a million dollars less that would instead begin with a "1". Of course, my comment was met with fake shock by the agent, who said something like "Why, this is a good deal even at the asking price! You have to realize what neighborhood you are in."
Uhhhh, yeah. Right.

In the end, it sold for about a MILLION dollars less than the asking price. I'll take my victory lap now. This is now great evidence of the fall in Laguna Beach home prices.

In any event, this is an ocean close/big house/big yard comp for $500 per square foot. It has 5 bedrooms, etc. Had some buyer trusted the outrageously high price originally sought by Coldwell Banker, they would have taken a $1,000,000 bath. Shame shame Coldwell Banker. Take note all.

2626 Victoria Drive Headed Toward Foreclosure

2009-01-03T00:33:00.000-08:00

Bluemove documented the failed auction at 2626 Victoria Drive just after Thanksgiving of 2008. Now, Bluemove has discovered that, according to Realtytrac.com, a mortgage default for this property was recorded in early December. This is the first step of foreclosure and this is becoming a more common factor in Laguna Beach home prices.

The highest market price from the bidders at the failed auction was $1,500,000, but this was well below the price the seller would accept. If and when the bank forecloses, perhaps the home will sell for $1,500,000.

How NOT to Lose at Least $500,000 in 2009

2008-12-31T20:48:00.000-08:00

As we enter the new year in this receding real estate market, it is hard to predict when the turn around will come. But....one thing I can do after following the Laguna Beach and Newport Coast real estate market for over a year is offer my opinion on what NOT to do.

So here's some invaluable advice that could save you $500,000 in 2009 if you are planning to buy in Crystal Cove, CA.

1. Do NOT buy 100 Sidney Bay Drive for the asking price of $2,495,000. In my opinion, this condo will be worth less than $2,000,000 some time in 2009 (if not now).
Jacquiline Thompson is the listing agent and it is listed on Redfin.com as a condo, not a detached single family residence. The neighboring property at 106 Sidney Bay Drive was, according to realtytrac.com, repossessed in 2008 on a mortgage having a value of roughly $150K less. What does this mean? The market has gone down since then. There's no way in my opinion that 100 Sidney Bay is worth more. Look for 100 Sidney Bay to sell for less than $2,000,000 in 2009, in my opinion.

2. Do NOT buy 88 Sidney Bay Drive for $2,488,888 - it is in the same club as 100 Sidney Bay Drive. Look for the value of these condos to go down significantly in 2009, in my opinion. The same could be said for the other homes in Crystal Cove - they could be positioned for a major hit in 2008, some losing a million or more dollars.

Laguna Beach Median Home Price Tanks in November

2008-12-26T21:46:00.000-08:00

Dataquick's latest numbers are out in the OC register and on www.dqnews.com.
The drop in Lagnua' median home price is quite astounding. It is now $970,000, down a whopping 47% from last year. To all of those people who thought high end areas were "immune" - here is your dose of reality. I've skipped open houses for the last 3 weeks and am glad I didn't buy a home last year - my losses would have already been staggering. Happy holidays to all out there. Peace.

2616 Victoria Drive Buyer Pays too Much....Loses At Least $1,000,000 in a Few Weeks

2008-12-07T21:18:00.000-08:00

We've written about 2616 Victoria Drive before - It recently sold for about $3,000,000. At the time we were very skeptical that the buyer overpaid.

Now, with the auction of 2626 Victoria showing that a completely new house just 2 doors away drew a maximum bid of only $1,500,000, the value of 2616 Victoria Drive has been shown to be shockingly lower.

So in sum, in my opinion, the damage is as follows:
1. The buyer of 2616 Victoria Drive has just lost more than $1,000,000 in a few weeks. That was a fantastic buying decision.
2. Gee, I want to use the same real estate agent who advised the buyer on the value of this house! NOT! (Does anyone know more about this transaction gone wrong?)

Top Of The World 37% Price Reduction

2008-12-03T21:29:00.000-08:00

Top of the World (TOW) is a great family neighborhood in Laguna Beach. It is located far up on coastal mountain adjacent to downtown Laguna Beach. It features its own sought-after elementary school located right in the neighborhood. Home values in TOW have been impacted in a big, big way.

Take 3241 Rimcrest Circle, Laguna Beach, for example. A 2400 square foot home in pretty good condition. Listed for sale at about $1,600,000, it sold for only $1,009,000! This is a huge 37% drop from the listing price to the sale price. Laguna Beach home prices continue to weaken in a big way, as evidenced by this sale - at only $420 per square foot.

2626 Victoria Drive Auction Report - Seller Won't Accept Highest Bid

2008-11-29T21:32:00.000-08:00

I took some time off today to wander down to the auction being held at 2626 Victoria Drive. I went because I wanted to gauge in real time what is happening with the Laguna Beach real estate market. This home was on the MLS at a reduced asking price of about $2,500,000. After the auction failed (see below), the listing price was cut by $300,000. Call me strange but I got a kick out of the auction.

The auction took place at about 1:20 pm inside the house. About 20 bidders looked on. The seller couldn't have asked for a more perfect day - the strong sun was sparkling off of a wide swath of the Pacific ocean - all viewable from the front deck. It was an uncertain atmosphere, with the bidders eyeballing each other and not quite knowing what to expect.
From the general appearance of the bidders and the cars they drove, I could tell that most bidders were fairly affluent.

The auctioneer first covered the terms of the Auction. The the winning bid had to pay an additional 6% buyer's premium, had to put 10% down by this Monday, and had to close escrow in 30 days. No contingencies were allowed for a winning bidder to obtain financing. The advertised reserve price was $1,900,000. I didn't check the auction disclosure for the square footage of this 3 bedroom house, but I'd guess it was about 1500 square feet. Not big.

The auctioneer tried to make a big deal out of his opinion that people would be getting one heck of a deal. He started bidding at $5,000,000 as somewhat of a joke. Silence.
He went down to $4,000,000. More silence.
He went down to $3,000,000. More silence.
He went down yet again to $2,000,000. More silence!
He went down to $1,500,000 and got a hit. One of the "Internet" bidders seemed to have placed a bid. Was it a real bid? I have no idea.

Having a starting point, the auctioneer went to $1,600,000 and did his auction lingo in that price range for a while. This was met with silence from the crowd. No one bid. The auctioneer then singled out a person in the crowd - "Sir, you are interested in this property, aren't you?"
To which the gentleman replied "Not at this price." Priceless!!!

The auctioneer, having absolutely no success in getting any other bids, announced that the action was over and that there was no winning bid because the reserve price hadn't been reached. All expectations were deflated and the bidders dispersed into the sunny Laguna Beach afternoon.

I'd say the owner of 2626 Victoria Drive can't face the reality that his home is really worth $1,500,000. It probably will be worth less next month! This shows me that Laguna Beach home values are a LOT lower than the asking prices. Only a moron would pay anything close to the asking prices of most of the properties currently listed in the MLS. In some coming posts, I'll detail some actual moronic buying decisions and how these buyers have lost huge amounts of money in very short times. Until then, enjoy the weekend and any open houses you attend.

2712 Highland Owner Prices Aggresively and Gets Buyer

2008-11-28T22:44:00.000-08:00

2712 is located close to Victoria Beach and has good views of South Laguna. It's a large family sized home that appears to be very nice and very contemporary. Rather than price this property at the same high prices of other Laguna Beach home sellers, this seller decided to go in with a lower price. This strategy likely avoided months of languishing on the market and the home moved before the current credit crisis and economic downturn. In hindsight, this was a brilliant strategy.

It all worked for the seller. The property quickly sold for $1,875,000 - very close to the asking price. This sale goes a long way to shedding light on Laguna Beach home prices.

Other homes in this area are listed at prices over two million dollars. Yeah....good luck with those......

Close Escrow...and Lose $500,000 (Or more!)

2008-11-19T21:36:00.001-08:00

We've written about 2616 Victoria Drive, recently sold for $3,000,000. Now that a neighboring house (2626 Victoria Drive) is being auctioned with a reserve price of less than $2,000,000, it looks like the buyer of 2616 Victoria has lost a least a half a million dollars in value. Not bad.

Buy a house and loose a half a million dollars.

In a month or so.

Bad decisions can be disastrous. In my opinion, buying 2616 Victoria for $3,000,000 was a very very bad decision.

I wonder what the buyer's agent advised the buyer? Does anyone smell malpractice?

Upside Down in Lagunita - A Million Dollar Buyer's Mistake?

2008-11-17T21:33:00.001-08:00

Lagunita is a gated community of about 60 homes on the ocean side of Pacific Coast Highway in South Laguna Beach. It is north of the Montage Resort and approximately across PCH from Ruby's Diner. Most of the homes are pretty dated, but some have been rebuilt. Victoria beach is really close.

In 2007, 4 Lagunita was sold for about $4.6 million. At the time, I was amazed anyone would pay this much for a small house that was NOT on the beach. A recent sale of a large modern home at 36 Lagunita for only $4 million could really lead someone to question the present value of the much-smaller and older 4 Lagunita property. We also know that Orange County home prices have cratered this year.

4 Lagunita is a 2 bedroom home with a small pool and a killer view. All that is well and good - but $4.6 million good? I wonder what kind of advice was given by the buyer's agent. How do you think the value has changed in 12 months? Of course, there is no real answer until there is a sale of the property. If you think the true value of this property is now, say, $3 million, then the buyers have lost about $1.6 million in 12 months. This is more than $100,000 per month and more than $3,000 per day!!!!

The home is now listed for rent on the MLS for $28,000 per month - yeah, good luck with that....

Wave of Foreclosures Washes Up in Victoria Beach

2008-11-11T23:37:00.000-08:00

The flippers are collapsing near Victoria Beach, along with Laguna Beach home prices. Check out 2626 Victoria Drive, Laguna Beach. I was in this home not long ago, when it was listed at $3.2M. Now it is listed at $2.49M and it is listed on Ziprealty as a foreclosure. In this environment, I will be surprised if it even fetches $2.oM.

A few blocks away is 2938 Rounsevel Terrace, Laguna Beach. This is a new 3 bedroom home now owned by the bank. This is another house that was listed way up in the stratosphere, but now is listed by its bank owner at $2.35M for an "as is" sale. I wonder what the contractor didn't do before he left. Nothing like buying a two million dollar house that "needs work." I expect this one will languish and go for under $2M.

2616 Victoria Drive "Sells" ??

2008-11-06T22:47:00.000-08:00

2616 Victoria Drive has been documented on Blue Move for a while now. A really small house with a good view and beach close, this home started out almost a year ago at an astounding listing price of about $4,300,000. After about a year on the market and repeated price reductions, the home shows as "sold" for $3,000,000. This at a time when at least one other redone home on the same street is listed for $500,000 less? Does someone smell something fishy here? This does not fit with the clear trend in Laguna Beach home prices. Hmmmm.

I researched the "buyer" of 2616 Victoria. It is a living trust located in Las Vegas. Let's look at the seller - a living trust located .....where else....but....Las Vegas, Nevada. Was this just a transaction by the seller between two trusts to effectively end up with a refinance? Let's watch this one now and see if it goes repo!!!

Bank Struggles to Unload 1435 Cerritos

2008-10-30T22:06:00.000-07:00

1435 Cerritos, a large family sized house back in Bluebird Canyon has been for sale for a long long time. It is listed on two MLS systems for $2M and $2.2M. These are newer listings - there is at least one older listing that goes way back - 6-8 months or more. The house then was laughably priced at $3M. It is big, but it really isn't that nice inside and left me with the impression that it was remodeled in some kind of ad-hoc fashion.

During all this time, a the home was subject to repo proceedings, which finished recently. The house, purchased in late 2004 for $1.5M, is not worth in my opinion much more than that now due to the retreating market. 2004 values are common in the OC and you can find 2004 home prices in Laguna Beach. Another reason it may not be selling is that it is in an area that has suffered at least one landslide in the past. Only a few houses away at 1413 Cerritos Drive, there is a GIGANTIC GAP on the downhill side of the street where a family sized home slid down the canyon in 1998. It was disturbing to me to see the downhill side of the upper front yard had sunk and tilted downward. Careful with this one, buyers.

The bank lowered the listing price briefly to try to get some offers, but I don't think that worked as the house still remains active. The listing agent was probably trying to bait some bidders into raising their bids. Looks like that didn't work. Perhaps the listing agent can give us an update.

22% Discount on Skyline Drive ....and No Sale

2008-10-21T22:14:00.000-07:00

Take a look at 1345 Skyline, a pretty nice house on a street with a great view. It has 3200 square feet and four bedrooms built in 1997.

On the market for a hefty 518 days, it was pulled from the market. The original listing price being pitched by Coldwell Banker Residential Real Estate was $3,200,000. Good thing some moron didn't bite because the price was reduced, reduced again and reduced yet again. In the end, the asking price was down to $2,495,000, which is about a 22% reduction. I've been inside this house during my househunt - it is very nice but it wasn't suitable for my family.

Of course, this house didn't sell at $2,495,000 and thus is worth less than that. How much less? I'd guess at least $100,000 less, but no one really knows how much less. Just like many other family sized homes in Laguna Beach, this one didn't sell and there are not very many, if any, comps available for a buyer to consider. This is another indicator on Laguna Beach home prices.

OC Home Price Implosion Makes News in Europe

2008-10-17T00:25:00.000-07:00

So, today I'm sitting in Dusseldorf Germany having breakfast and reading the International Herald Tribune. What do I see but an article about USA real estate that focuses right in on the OC! The collapse in the OC is international news! Given the pain in the stock markets, I expect Laguna Beach prices for family homes (not on the beach) to continue to slide downward.......

What a Month

2008-10-09T22:11:00.000-07:00

All, again sorry for the inactivity. Good news though. Three days before all of this financial craziness I managed to sell (close of escrow) my prior home. The escrow craziness and a year long adventure to try to sell this house is over with. Now onward with the home shopping!

Isn't it interesting that the stock market has dropped back to a 2004 level? This reflects almost exactly the housing market, which in price terms has dropped to a 2004 or even a 2003 level. It is almost as if the disappearance in value from the real estate market has been matched by the loss in value of the USA stock market. Coincidence? Or linkage? I think linkage.

Price Cuts (33%) Spread to Temple Hills Drive

2008-08-27T23:00:00.000-07:00

Mr. Blue has been watching 1645 Temple Hills Drive for quite a while.
This house was pretty nice and had a great view.

But it didn't sell until after it was marked down a huge $1,000,000.
The original asking price was almost $3,000,000 and it sold in June for slighly less than $2,000,000. Boy, Surterre Properties sure did misprice this home!

And finally, why would ANYONE pay the asking price for an obviously distressed property? The buyer bid the asking price in June 2008.
Does this sound like malpractice by the buyer's agent? Thoughts?

ESCROW!!!!

2008-08-19T21:13:00.000-07:00

Joy joy joy. My house north of LA is in escrow and hopefully will close soon! only 10 more days until all contingencies are lifted and I'm outta there!!!!

Laguna Home Sales Continue Slide

2008-08-18T22:12:00.000-07:00

Dataquick's latest numbers are out for July. The number of properties sold in Laguna Beach is down 8% as compared to last July. Last July was not a good selling month and the market has slid even lower than that. This is a down indicator during what otherwise should be the peak of the typical selling season. The volume decrease is an irresistable market force that will drive prices lower. And prices have gone down for family homes - stay tuned for a post on this. All of t his does not bode well for the second half of 2008. Lookout below!

2616 Victoria Drive Update

2008-08-15T23:04:00.001-07:00

There have been a lot of comments on this house on the blog.
It still appears to be listed at $3.7M. Someone claimed it was under contract but the listing still shows active so I think someone thought better of buying this small little Euro Box.

It doesn't compare well to the competition. For example, 170 Dumond is virtually brand new and is BIGGER and is in the same neighborhood, yet can't appear to fetch the much lower asking price of $2.89M.

Also 2626 Victoria Drive, brand new and BIGGER and has more parking and hasn't sold in over TWO years and has a listing price of $3.25M.

Even closer to the beach is 2670 Victoria at $1.8M. It is about the same size but older.

There you have it, three good reasons why the asking price for 2616 is a way way out of line. I wonder what the sales pitch is at the open houses for this property? How about "you really should buy this just because we have priced it so high - it is very exclusive, you know!"

1283 Starlit Drive - Another 11% reduction in price

2008-08-12T23:09:00.000-07:00

This blog long ago identified the overvalued remodel at 1283 Starlit Drive - deep in Bluebird canyon. Well, the seller just reduced the price by $100,000 to $800,000. Considering it was bought in 2007 for $1,100,000, the asking price now represents about a 30% decrease. This is merely a comparison of the asking price and the last sale price. If (and when) the property sells for less, the real reduction will be even more. And this doesn't include the flipper's remodeling expenses.

Family homes in Laguna have slid downward big time. 1283 Starlit is Exhibit A.

Update: This home sold in April of 2009 for $835,000.

Back N Blue

2008-08-12T22:54:00.000-07:00

Hello all. I must apologize for not blogging in a while. You see, I've been looking at the inside of many aircraft cabins, all of which were zipping across the globe. I've been above the Artic circle. Many times. I had the pleasure of being in O'Hare airport while an evacuation was attempted due to a tornado warning. Yes, the food is no good, the wine is lousy on the airlines and it certainly is great to be back in the OC. A quick look at the Laguna Beach listings reveals mostly the same old tired listings. Looks like a few fools have bought, but most people are wisely watching the market slide downward. Let the blogging begin anew!

1315 Dunning WTF Nuked by Next Door Comp Killer

2008-06-06T21:54:00.000-07:00

1315 Dunning, back in the peaceful part of Bluebird Canyon, recently went on the market for $1.95M. It is the lower house shown in this picture.

Don't look next door...

1315 Dunning's listing says "This completely remodeled craftsman home is a masterpiece."

Hardly. I've been inside and its very very average.

Don't look next door.....

The listing goes on trying to make ordinary something more: "Offering hand hewn hardwood floors, Gourmet kitchen with stainless steel appliances and much more. "

Don't look next door, the listing agent hopes!

Why? Next door at 1325 Dunning sits the upper house in the picture. This home is also a "masterpiece." Its a DEAD ON COMP. Sold January 17. Sold for ONLY $1.35M.

When I was inside 1325 Dunning, the agent showing the house played dumb about the neighborhood until I said "That house next door, it looks familiar."

Dread on the agent's face.

I continued "I think it sold for a loooooot less, about 1.35 million." I could almost hear the agent thinking "oh no, an informed buyer - I won't be able to sell the house to this one."

In the end, she stammered "Oh, yes...but it was a short sale." I asked "wont the appraiser look at it? It could have sold for more if it was worth it?" She could do nothing but agree and hope that I would leave quick and not infect other buyers with the truth. This agent showing the house was not the listing agent.

So there you have it. A WTF price on Dunning from listing agent Shauna Covington. What's she thinking? It must be "I hope a moron shows up with an offer." I would think that most people would agree that the listing price does not reflect an honest valuation of this property. I wouldn't put my name and reputation at risk by putting a rediculous price on this listing. Buyer beware of Laguna Beach home prices.

Sales of Family Homes Approaching Standstill in Laguna Beach

2008-05-30T22:22:00.000-07:00

If you follow the market, you already know this. The market is getting slower and slower and slower. Less sales. Many listings of family homes are retreads of failed 2007 listings. High prices and no takers. (and I'll say that the few takers near asking prices are simply misinformed or completely uniformed buyers)

Trulia.com's Feb-April 2008 home data for four bedroom homes shows only 5 selling during that period. In 2007, 11 four bedroom houses sold during the same time. This is about a 68% decrease from 2007. Another indicator that big price drops are ahead - sooner or later, more people will want to sell and laguna beach home prices will drop further.....