Foreclosure Activity Keeps Surging in Crystal Cove

Time for an update on foreclosure activity in Crystal Cove. Like anywhere else, a spike in foreclosure activity is likely to precede a drastic drop in home prices.

And the Crystal Cove foreclosure activity is UP since I last checked.

The foreclosure activity includes recorded notices of default, trustees auctions and then the resulting properties are "bank owned."

About twelve months ago, there was only one property in crystal cove that had foreclosure activity. About six months ago or so there were five properties involved in foreclosure. The twelve. And as of today, there are thirteen, according to Realtytrac.com. This pretty much proves out what I've seen with the homes in Crystal Cove - homes can't be sold for the debt they carry and home values are dropping fast. Homes that are priced high are just sitting there with a few exceptions...... Some listings have drastically reduced listing prices as some owners have determined that it is better to get the home value now rather than lose more in the coming months.

How many of those "good" real estate agents have told our readers about this spike in foreclosure activity in Crystal Cove? Or do you see agents citing the same old and tired statistics. Be careful out there......

LA Times - High End Owners Forced to Drop Prices

Good article on high end homeowners testing the market, then having to make huge cuts to their asking prices. Testing the market? Is that like a hunt for the rare moron who will drastically overpay for a house? I'd say there are a lot of owners "testing the market" in Crystal Cove, Neport and Laguna Beach.

$358 Per Square Foot in Top of World - Bluemove's Value Prediction on 3216 Tyrol Comes to Pass - It sells for about 50% of the original list price

I've previously written last July about the value of 3216 Tyrol, which at one time was listed for sale at $3.2 or $3.4 million, and more recently listed for about $2 million. I said at the time, i'd pay 20%-30% less, given that the home was purchased in 2007 for $2M, back when values were a lot higher. My inescapable conclusion? The home in my opinion was worth to me much less than $2 million.

Well, it just sold for $1,685,000.
This is why I do not trust whatsoever the original listing prices for some of the homes for sale in Laguna Beach as being representative of what I should pay for a home.

This sets a comp price point of $358 per square foot for homes in the Top of the World Neighborhood. This is yet another decline. You probably won't hear about this from your agent. Until you ask.

Buyers Remorse Part III, More Recent Buyers in Crystal Cove Lose Big Just After Escrow Closes

We have been documenting the crash in Cyrstal Cove home prices.
More recent buyers have been burned - and their homes fell steeply in value only months after the close of escrow, if not on the very day escrow closed. This blog has warned buyers to be careful with plunging Crystal Cove real estate values. Buying a home in Crystal Cove is sort of like buying a new car - you leave the lot and you've lost a healthy chunk of what you paid.

Case in point - The buyer of 124 Sidney Bay Drive, bought last June, has probably lost well over $500,000 of value after only about 4 months of ownership. And things are not getting better.
The home was bought for $2,650,000. This is $684 per square foot. The buyers agent identified by Redfin.com, is Rick Langevin of Surterre Properties Inc. Read on for some nearby sales.

The homes on Sidney Bay Drive are largely the same kind of Tuscan stucco boxes, but I've adjusted the selling price for the differences in square footage.

Only 4 months later, 100 Sidney Bay Drive sold in October 2009 for $1,900,000. This is $491 per square foot.

Then 1 month after that, 106 Sidney Bay Drive sold in November 2009 for $1,652,000! This is $561 per square foot. Likely they never knew about the comp at 100 Sidney Bay drive because i sold only a few weeks before. Some may conclude that they paid $60 per square foot too much....

Factor all of this in and the 124 Sidney Bay property is worth a lot less based on these recent sales.

Be careful out there.......

Accurate Forecaster Warns - Don't Buy - High End Homes Such as Those in Newport and Laguna Beach Will Continue to Fall Through End of 2010

I recently had the pleasure of attending a presentation of Dr Esmael Adibi, who has a track record second to none at predicting the OC housing market. His presentation was very credible - he reviewed his predictions from last year and they have come to pass. His message? DO NOT BUY a home in places like Newport Beach or Laguna Beach until at least the end of 2010. He said that such high end value areas will continue to fall in value. For a median price house in cheaper neighborhoods, Adibi said it is OK to buy now.

My take is that buying a home in Newport Beach or Laguna Beach is just like buying a car - drive it off the lot and take a huge hit in value. Closing escrow is just like driving off the car lot - buy a house in these beach towns and close escrow and LOSE a ton of money from the value decline during the escrow period. And for these hapless new owners, more losses are coming, with every passing day. Of course, real estate agents get paid on the day escrow closes, so they have absolutely no interest in what happens after that - you're on your own if you are a buyer!

Esmael Adibi is director of Chapman University’s Anderson Center for Economic Research. He has a stunningly accurate track record on predicting the housing market. He was early with a prediction that the O.C. housing market was in for a fall.

I'm standing by watching the Laguna Beach, Newport Beach and Crystal Cove home prices decline...........

Sale of Repo at 1130 Summit Drive Fails - it Falls Out of Escrow

We've written about 1130 Summit Drive, which supposedly (according to comments posted on this blog) garnered offers in the neighborhood of $2 million and perhaps one offer with a higher amount that was chosen to go into escrow.

Well, so much for that - the home presumably fell out of escrow and was relisted at the end of December and the price was reduced by about $35,000, to $2.37 million.

Does anyone know what happened? Problems with the buyer? Cold feet? Something wrong with the house?

At a minimum, this price reduction may impact the home in escrow next door at 1289 La Mirada Street. This older home in need of updating is one lot up the hill but on a better, flat street, but now it may be worth less than its lofty listing price of nearly $2 million, given that the 1130 Summit Drive house is moving downward in the direction of that price. They are virtually the same square footage Both of these homes are in Arch Beach Heights area of Laguna Beach, which is one of the less desirable areas in Laguna Beach and is not known as an area packed with really expensive homes. I wonder if the La Mirada buyer will get cold feet.

The listing broker for both homes is the same - Prudential California Realty. I wonder if this broker will tell the buyer of the La Mirada home about the failed sale of the neighboring house? Or will the buyer's agent be smart enough to find out about it? This failed sale may provide a very relevant comp data point for the La Mirada house. And that comp data point has fallen in value judging from the recent price reductoin......tick, tick, tick.....will another price reduction come? Probably..........

Newport Beach, Laguna Beach, CDM and Newport Coast Lead County in Price Reductions

John Lansner's blog has a good posting identifying the communities with the greatest price reductions on MLS. Newport Beach is number 1, with the greatest price reductions and Corona Del Mar, Laguna Beach and Newport Coast are all right up there. What does this mean? It means that real estate agents in these areas generally are listing properties at unrealistic asking prices. If no one shows up to pay the initial asking price, the market is forcing price reductions. Buyers should beware of asking prices given this hard data - the true value of these properties is likely to be far, far below the asking price.

1130 Summit Drive - Good Deal or Not?

Recently, 1130 Summit Drive was foreclosed upon and listed by its new bank owner. It is big, w/5 bedrooms, very nice inside, but no yard, on a very busy steep street and the house is all vertical - 4 stories up to the kitchen from the garage.

The bank wants $2.4 million - that's quite a steep price for a home in Arch Beach Heights, which is typically a low value area in Laguna Beach. Rumor has it that there were multiple offers a few weeks ago but even then the price didn't go that high. Now though, it looks like the house is under contract.

Oh yeah, the neighbor's house (1289 La Mirada St.), which is bigger and is uphill on a better and level street, was recently listed for $500,000 less. Not a good sign that 1130 Summit is worth anything near to the asking price, in my opinion.

What say ye? Is someone going to get a good deal or is the new buyer getting a load of trouble - a house that's going to sink underwater yet again in the future?

Dataquick October Numbers - Houses Above $2M in Laguna Overpriced

The October dataquick numbers are in and the median price is flat for Laguna Beach, compared to recent months.
The median single family home price in Laguna for October was $1.195 million, but this is down a whopping 36.4% from October, 2008.

The interesting thing is that while the median price has been flat in the recent months, the economy and the lack of good financing is just killing the homes priced above the median, for which one would borrow more than the current $729,000 conforming jumbo limit. Specifically, sales of homes above $2,000,000 have been frittering away to nothing as the year has progressed. No sales of these homes in October. None at all. This means that homes in Laguna Beach that are listed for above $2 million are SEVERELY OVERPRICED.

I wouldn't want to be a buyer of one of these homes earlier in the year - If I was, I would be listening to my home value deflating below the purchase price. sinking underwater......

Values Continue Crash in Crystal Cove - Buyers Remorse Part II

In an earlier post I wrote about the decision of a recent buyer of 18 Rockshore Bluff to pay $4.4 million. The value of this home was questionable, I thought. If it is that obvious, I wonder what kind of advice the buyer's agent gave to the buyer who was forking over $4.4 million.

Well, hold on to your hats. And hold on to your loan docs, Bank of America, for the $3 million mortgage that you wrote on 18 Rockshore. It is worth much less now, only months later.

2 Rockshore Bluff recently sold. For about $2.6 million. Practically identical house. Same 3800 square feet. Same killer view. The photo is from 2 Rockshore.

Let me get out my calculator. $4.4 - $2.6 = $1.8 million dollar loss in less than six months.
The B of A loan on 18 Rockshore? Already underwater. The buyer? Underwater. The agents involved? My guess is that they are laughing all the way to the bank.

Crystal Cove home values are going down big time. And there are many overpriced listings. Do the due diligence and research. Be careful out there.....