Laguna Beach Sales Numbers Drop at Height of Summer Selling Season

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.

1283 Starlit Drive - Another Member of the Laguna Beach Desperate Flipper's Club

Bluebird Canyon is a nice part of Laguna Beach. 1283 Starlit Drive is located well inside the canyon and was just listed. Too bad that it is a just finished remodel that has hit the market waaaaay tooooo late.

Purchased for $1,100,000 in early 2007 before the bottom dropped out, the asking price is now a hefty $199,000 more, totaling out at $1,299,000.

The listing comes right out of the box with a desperate plea: "Seller will carry!! Beautiful home remodeled, 4bed 1 bed converted to family room /office. 2 full bath one story,shows very well,great for large family or roomates. Has seperate entrances. Wood floors, newer carpet and tile,ceiling have been scraped,formal dinning room, fireplace in living room. Many fruit trees in yard, very private. Open floor plan. Please call listing agent for special financing detail. "

So let me get this straight. I should pay $200,000 more in a DOWN market for some wood floors and scraped popcorn ceilings??????? The listing photos DO NOT show the kitchen, so I'm wondering if the old kitchen is in this minimal remodel. But sure, I'll pay the listing price anyway - because the "Seller will carry". Easy loans just like the good old days means I don't care what the purchase price is. Let the good times roll!!! Yeeee-haaaaah! Booooo YAAAAA!!!! Sign me up!!!!!!

Seriously. I'm wondering when the $900K offer comes in.............

31985 Virginia Way

Here's another retread that didn't sell in 2007. This place was bought for about $930K in 2003. Given property in Laguna has slid backwards to 2004 prices, there's no way this thing is a good deal at the asking price of $1,329,000. The lowest listing price was LESS in 2007 and it didn't even sell at that. Hello, bank, are we reaching? Do you all have calculators over there? Also, the house is located in South Laguna, where things have historically been less expensive.

The wood floors have got some wear and the stone work is kind off odd. There is no garage. There is no master bath. The bedrooms sure are small. PCH and its NOISE are mere feet away. The house feels small.

The extra bedroom with a "full" bath is so small it might as well be a closet. The bathtub is located in a tunnel up above floor level.

Really, the bathtub is in a tunnel.

Inside the house.

Really disappointing.

31401 Holly Street, Laguna Beach - WTF?

This house gets the "Market Chaser" award. Remember back in the 90's there were sellers who just couldn't lower their price, only to reluctantly lower it too late, after the market had gone down yet again? These people slowly reduced their prices but never quite caught up with the market. The result? NO SALE and losses galore.

Well, 31401 Holly Street, Laguna Beach may be firmly going down that road. Listed for over 6 months, the owner recently cut the price from $2,900,000 to $2,700,000. I looked at the house last weekend. OMG is it just awful. The showing agent was quick to point out that it has a yard and a "great" location. The view is good, but that is counteracted by the closeness to PCH, which on Sunday sounded really loud from the house's deck. Not only that, the house needs maintenance badly and remodeling in a big way. And it smells. And it is dirty. And the quality of the decorative detail is not top notch. Not $2M material by a long shot. $1,600,000? Maybe. The way OC home prices are declining and the way Laguna Beach home prices are declining, I wouldn't look for this to sell anytime soon.

Good luck with that.

685 Nyes Place - Average with a good view

Last Saturday, I stopped into the open house at 685 Nyes Place.

Located high up on the hill, it had an impressive view, but that's about it. This is in the Arch Beach Heights part of town, waaaay up above the Montage Resort.

The kitchen was redone in a half-hearted fashion, with new cabinet fronts stuck on ancient cabinet bodies. The place has a less than inspiring design and really struck me as "cheesy tract home" in feel. Check out that cheesy sandstone slapped around the front door. Why dear, did Frank Lloyd Wright design this one? NOT!

The street out front has heavy traffic and is not flat so it is not very kid friendly. The outside decks hint at needing work, and a coat of new paint is trying to hide it. The house is vacant, so someone really should be motivated to sell.

At a listing price of $1.89 million, the house on 685 Nyes Place, Laguna Beach, strikes me as overpriced. What will it sell for? Given the trend in recent OC home prices, I 'm wondering why it would sell for anything near to the listing price. Get realistic! Good luck seller, you'll need it!

Severe Price Cut Shows Real Recession in Laguna Beach Home Prices

Happy new year(?)

The lack of many sales in the last half of 2007 has left BlueMove and everyone else without much information on the real valuation of Laguna Beach home prices.

Well, wonder no longer. Someone wants to sell and that someone is probably a bank that now owns 581 Diamond Street, Laguna Beach, California. A 4 bedroom, 4 bathroom, 2100 sq. ft. home. This home was just listed in the MLS.

Asking Price: $1,449,500
Prior Purchase Price: $2,144,641 (August 2007)
Prior Purchase Price: $2,600,000 (April 2005)

If the house were to sell at the asking price, the total loss from the peak would be about $1,250,000, including real estate commissions. If the home sells, it could show what it takes to actually sell a mid level house in Laguna Beach in today's market. Such a price, a 50% loss, is a wipe out, wash out and a blow up.

More to come on local listings. In the meantime, it is scary how fast prices are falling! OC home prices are going down.

Fanta-sea Listing of the Week

UPDATE: After being listed for 3 years, this home was withdrawn from the market at the end of 2010.

Given the state of the RE market in Laguna Beach, this listing at 1177 Temple Hills Drive floored me. $3.7M for a 2bd house built in 1933 that comes with a "legendary cactus plant." Is it a cactus plant that blooms gold bars?? No? Ok, is the cactus planted on top of an underground vault filled with gold? No? Uhhh, I don't get it. Views of the ocean? Yes, but then again, most ocean view properties I have been following are languishing and subject to repeated price reductions.

The lot is large - 16,000 sq. ft. but still I predict that this house will sell for no where near the listing price, if it sells at all. If there is an open house, I will try to get a picture of the cactus!

Flip Flop

Another data point on OC home prices. I hit a few open houses last weekend up in the area of Terry Road, the neighborhood by Nyes & PCH. I went into an open house and asked "What ever happened to the house for sale over at 2800 Terry?"

The agent at the open house said that the house had been taken off the market. Must be waiting for the spring selling season in hopes of getting an offer.

I looked at the house from the outside and it certainly looked empty. The last asking price on the MLS was about $2.5M, which is very high for the neighborhood. The entire neighborhood has inconvenient beach access and suffers from PCH traffic noise. The next time you get OC quotes on comps from an agent, take them with a grain of salt if they are before October!

The house is new, but it is pretty vanilla inside - scattered on three floors and really lacking in design energy or excitement. Methinks it won't be going anywhere fast in 2008.

Prime Beach Properties Roll Back To 2005 Prices

Blue Lagoon is a condo complex located just to the north of the Montage resort, between PCH and the beach. A look at the listings reveals price rollbacks to 2005 levels:

15 Blue Lagoon - Listed at $1.69M; Purchased 9/05 for $1.69M

4 Blue Lagoon - Sold $970k; Purchased 8/05 for $1.05M

Is this the bottom or just the first cracks in the Laguna Beach housing market?

Key Analyst Reports This Downturn Will Be Worse Than 1990s

In the November issue of Builder magazine, Ivy Zelman reports that "I firmly believe that this housing recession will substantially reduce consumer spending in 2008 and 2009. I also believe that this downturn is much more severe in many markets than the 1990–1991 housing recession and is much wider in scope." Zelman is a highly respected housing analyst who warned of the current housing market woes well in advance. You can read the article here.

Zelman also reports that consumers have lost complete confidence in housing, and that "recent results speak to the severity of this downturn. Sales have nearly disappeared in many metro markets." Given that Laguna Beach is more linked to consumer spending than other OC areas, I wonder if it will get hit the hardest. The first things to go when consumer spending tightens are second homes and luxury vacations.

Ouch, that sounds like us, right here, right now.

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!

Chapman Economists Predict OC Recession in 08 and 8% Loss in Home Prices in 08

The OC, normally a solid job engine, is headed for a recession in 2008, according to economists at Chapman University. Chapman economists Esmael Adibi and Jim Doti have been predicting job growth in Orange County for 30 years. They say job numbers will turn negative starting in the second quarter of 2008 and stay negative in the third quarter. That qualifies as a recession, according to Chapman’s definition. “There is little doubt that the economy is hurting from the demise of real-estate related activity,” the economists write. “It is clear that construction and financial activities are the weakest sectors of the economy followed by trade, transportation and utilities which are indirectly affected by the housing market.”
Most importantly, they also foresee an 8.1 percent drop in the median price of a resale single-family home in 2008. Applied to a Laguna Beach home bought today for $2,000,000, that would mean a $160,000 loss in one year. Scary for homes in Laguna Beach.

You can view the story here.

Huge Resale Losses in Laguna Beach

Cal State Fullerton professor Michael LaCour-Little has done a study looking at recent sellers of O.C. homes who sold for less money than they paid. (And that’s losses without transaction costs figured in.) Laguna Beach was the top lower in Orange County with a staggering average of about $577,000 per money losing home sale.

He also found that 37.6% of all sales he tracked resulted in a loss and typical ownership tenure of losers was two years.

These deep losses weren’t the most startling result to LaCour-Little. Rather, he was startled by how the size and scope losses grew as the year progressed. For example, losing sales were slightly more than 20% of deals tracked in January but nearly 70% in October. “I didn’t expect to see so much of a time trend,” LaCour-Little said.

You can get the full story here.

Fanta-sea Listing of the Week

Look at this Laguna Beach property that was just listed. Yes it.... is a ..............cartoon. A $2,800,000 cartoon. As shown, the cartoon shows what a house would look like IF one was built using the approved plans that come with the property, located at 940 Hillcrest Drive, Laguna Beach.

I haven't driven by to see if the property is an empty lot, but the current owner purchased the property in October of 2006 for $1.45 million. Well now, since the seller has approved plans, there must be some added value, right? Of course!

Even though prices in Laguna have been diving, this property is priced at $2.8M!! That's right, those plans must be worth at least $1.35 MILLION DOLLARS! A seller's fantasy land? Time will tell and I'm betting there will be plenty of time to tell as this listing may languish.