Zillow Index Shows 14% Decline for Laguna Beach

Hot of the presses:

The Zillow index for Laguna Beach shows a decline of about 14% year over year. For someone with a $2,000,000 house value as of last January, the value has declined a whopping $280,000 in 12 months. You can view the index here.

Think about it. That's a $23,000 or so loss EVERY MONTH for a year. Yikes!! ....and the trend is down. Look out below for Laguna Beach home prices. This could be good for Laguna Beach real estate agents, as lower prices eventually will mean more sales, and right now there are pitifully few sales.

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!

581 Diamond Street Update - Foreclosure Confirmed

Had time Saturday for some open houses. I stopped at 581 Diamond even though it wasn't held open because I saw a legal notice on the front door. Sure enough, it was a foreclosure notice. So it is confirmed - it is a foreclosure seller who is trying to unload the property with an asking price more than $1,000,000 LESS than the prior sale price, which was only only last year. I wonder if this is a sign that banks will price cut much more this year, which will put severe downward pressure on prices on Orange County home prices and by default, Laguna Beach home prices.

Top of the World Sales (Or Lack Thereof)

I've listed some recent sales from the Top of the World (TOW) neighborhood. TOW is a highly sought after family neighborhood here in Laguna Beach. It is WAY up on top of the coastal mountains. It has flat streets and a great elementary school, perfect for kids riding bikes and for parents who walk their kids to school. Homes tend to be less expensive up in TOW, except for the homes that have a good ocean view.

In any event, look at the data. Almost NOTHING has sold in the last half of 2007. This tells me that the market value of the TOW homes is way, way below the asking prices. How far? 20% ?
30% ? Do I hear 40%? Maybe........


HOME SALES ON TOP OF THE WORLD: (address/sale date/selling price)
3175 Mountain View 7/07 $1,640,000.
3005 Mountain View 8/07 $1,422,000.
3174 Bonn Drive 2/07 $1,582,000.
2855 Chateau Way 3/07 $2,375,000.
2860 Chateau Way 3/07 $1,525,000
2861 Chateau Way 5/07 $1,725,000
2975 Chillon Way 2/07 $1,425,000
3335 Alta Laguna 7/07 $5,480,000.
28761 Top of the World 8/07 $1,100,000.
3271 Rimcrest Circle 7/07 $2,650,000.
2821 Ridge Drive 8/07 $1,550,000.
28911 Temple Hills 6/07 $1,400,000.
2265 Bridge Road (Pke) 5/07 $1,900,000.
2270 Park Avenue 5/07 $3,350,000

My Buyer Bails Out

I found out yesterday that the house I am trying to sell in La Canada likely will fall out of escrow. The buyer grew nervous after septic tests were only partially successful. You see, La Canada doesn't have sewers, so septic tanks are an issue in every sale in the Flintridge area of town, which was where I lived.

Panic has not set in, though. In the four months I've been following the Laguna Beach real estate market, I'm more convinced then ever that prices will go down to the point where I can get a pretty good house without the need to sell the old house, which I can rent out.

Wells Fargo Economist - Buyer's Market in 2008

Lansner's blog has a pretty good interview with Wells Fargo economist Scott Anderson.

Here's a good quote from Anderson:

"The O.C. housing market is becoming more unbalanced by the day. This is evident in the glut of existing home inventories in the County. Unsold existing home inventories in Orange County hit 25.3 months at current sales rates. That is five times the level of inventories found in a “normal” housing market with rising home prices. The final nail in the proverbial coffin was the August and September financial turmoil, which is quickly morphing into a full-blown credit crunch."

You can read the entire interview here.

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.

Merry Christmas

Merry Christmas from the Blue Move household! Be it renter or owner, we all should be thankful for the people in our lives and everything else, for that matter. To the right you will see a Christmas card drawn by by son, done in the sand right here in Laguna Beach. Forget about all the economic analysis and OC home prices for today and enjoy those around you!

Have a festive holiday!

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!