Open House Carnage in Newport Coast

We decided to check out some open houses in Newport Coast a few Sundays ago. I witnessed a crazy situation, but more about that later.

One of our purposes was also to see how many kids are in the neighborhoods in the area. We want to get into a neighborhood that has a lot of kids so our kids have some playmates. Anyone have thoughts on Newport Coast for that?

In any event, we stopped at the house at 8 wayside. It turns out that it is a disappointingly small two story house given its $3.79M asking price. The view was nice.

But get this.

I come out of the house to get back into my car...and...

The owner of the house is out front with the garage door open and his Ferrari PINK SLIP out, trying to SELL his car to somebody. Sell Sell Sell, economic times must be tough at 8 Wayside. I think I'll just wait for this one to go REO before I even think about making an offer. (In my mind, it is a $2M house.)

We saw a few kids out and about in this neighborhood, but only a few. This did not inspire confidence.

Why I Can't Live in Irvine

In the last few months, my family has had considerable debate about where to live. Community, schools, location, etc.

There's one thing I can't stand. Homeowner Associations that get out of control. There's a well meaning kid in Northpark in Irvine who's been singled out by some people who clearly are deranged and have too much time on their hands.

I'd welcome his family as neighbors any time, with one blue van or even two.

I've always been reluctant for some reason to consider living in the over-regulated stripmall sameness of Irvine. Now I'm firmly decided - avoid Irvine!!!!!

Read about it 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.............

Bluemove Exclusive - "Sell my Rolex to make the house payment"

My family frequents Ruby's on PCH in south Laguna. Some nice local tidbits were heard there this weekend. One family was discussing home mortage issues. A man of the heretofor well-off family declared: "I think I'll sell my Rolex to make the next house payment." "I might be able to buy another one in five years." My, my, doesn't that inspire confidence in the local house market. Buying I will not do.

By the way, Ruby's is an awesome place for families with kids. They have big booths and the staff takes orders quickly, so that food is delivered before the little ones get bored. Also, the paper car models that are given to the kids are fun little diversions that preserve mommy and daddy's time to enjoy a meal outside of the house. Hats off to Ruby's.

This is yet further buzz that supports the grim picture that real estate values in Laguna Beach are sinking fast. Laguna Beach can't fight the market and swim upstream - just like Orange County home prices are sinking, so goes moneyed Laguna Beach.

Desperate Laguna House Flippers

Below are some 3 bedroom or larger homes that strike me as flips gone wrong or about to go wrong, especially since Laguna Beach home prices are spiraling downward:

2867 Terry Road - Asking $1,895,000, bought it for $1,850,000 in 2006. Listed for almost a year. This house is a small 3 bedroom, but it is nice. No yard though and really close to PCH noise.

954 Miramar St- Asking $1,099,000, bought for $1,000,000; listed in 2007 and recently relisted to make it look "new".

31371 Monterey St - Reduced to $2,050,000, bought for $1,400,000. I visited this one this weekend and they are eager to sell - further price reductions likely on this one. This house sits right above PCH - a very noisy location. The renovation stopped at the doors - there are some ocean decks that are in bad shape - a sign of financial distress.

1914 Upper Rim Rock - Asking $1,980,000, bought for $1,500,000 and about $200,000 spent on remodeling. Listed for over 100 days. The predictor says......watch for a price reduction.

454 Broadway - Asking $1,549,000, bought for $999,999. Listed for over 100 days. Ditto - price reduction soon. Broadway street is the 133 highway - this is a bad location.

645 Buena Vista Way - Asking $3,850,000, bought for only $200,000 less. Listed for 148 days. Can you say "watch for the repo man?"

2616 Victoria Drive Update

Reality is setting in down on Victoria Drive - in over 100 days on the market it has not sold and the asking price has been reduced to just shy of $4,000,000. The price has a long way to go down, however, as this house doesn't compare well to other beach close homes in gated communities that are beach close, with community amenities and parking. This house, while nice, is small and has neither.

Looks like Laguna Beach home prices and Orange County home prices as well continue to slide.

Enough Already with the BS!

Is it just me or has the mantra of local real estate agents taken on a more drastic tone that is intended to mislead home buyers? You've probably had the same experience - you go to an open house, ask about the price of the house and the bad market and you get an answer that is not on point and intended to distract you from the TRUTH, which is that the house you are looking at is probably worth less, possibly much less that the asking price. It is no secret that Laguna Beach home prices are down, down big, yet I've never heard a realtor actually say it.

Case in point. Michael Gosselin of Surterre Properties says in a January 15, OC Register article that "...there are some bright spots, too. In Laguna Beach, our median price for 2007 is actually up from 2006, albeit by just a small amount. Based on the MLS data, the median price in Laguna Beach rose from $1,655,000 to $1,700,000, or a little less than 3%." I'd like to see that data, Mike, because the media seems to be reporting a much different picture.

I checked Dataquick's December numbers posted by the OC Register. December 07 median price for a home in Laguna Beach is down a full 14% from a year ago. Up 3%??? Not. Down 14%. The most current numbers in a dynamic market can't be disputed. Even if somehow Mike was referring to the median sale price for all 12 months of 2007, he is still wrong. That number, while probably a meaningless indicator of the current state of the market, is also DOWN 4.4% per the OC Register and Dataquick. Again, comparing the median price for ALL of 2007 to ALL of 2006 really is not too close of an indicator of where the market stands TODAY. For that you want the Dec 07 median v. the Dec 06 median that shows a decrease of 14%.

What is that in money terms? Well, it means the owner of a median home would have lost over $150,ooo in 2007 - more than $10,000 per month!

Some "bright spot"!!!

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.

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.