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

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.

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?)

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

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.

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.

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!