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

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?)

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

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?

2616 Victoria Drive "Sells" ??

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!!!

2616 Victoria Drive Update

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!"

2616 Victoria Drive Update

Reality is setting in down on Victoria Drive - in over 100 days on the market it has not sold and the asking price has been reduced to just shy of $4,000,000. The price has a long way to go down, however, as this house doesn't compare well to other beach close homes in gated communities that are beach close, with community amenities and parking. This house, while nice, is small and has neither.

Looks like Laguna Beach home prices and Orange County home prices as well continue to slide.

Canary in a Coal Mine

In the old days, coal miners would take a canary into the mine as an early warning system - the bird would pass out if the air couldn't sustain life, giving the miners an early warning to get out of the mine. Laguna Beach real estate is no different.

Witness our own Laguna Beach Canary, 2616 Victoria Drive. Bought in March 04 for about $1.5M, it now sports an astounding $4.3M price tag after an extensive renovation. I doubt this flipper spent more than $1m on it, but in any event, it has been listed 51 days already. It is in an awesome location quite close to the beach, but it lacks the common area amenities found in local gated neighborhoods. Given prices in LB have slid back to 2005 or so, I'm wondering if this one will sell at something like $2.2M-$2.5M.

Stay tuned for our canary watch! In the meantime, keep an eye on Laguna Beach homes for sale!