2712 Highland Owner Prices Aggresively and Gets Buyer

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!)

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?

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

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" ??

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

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

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

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

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

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?