Laguna Sales Crater - Laguna Beach Has 6.25 Years of Real Estate Inventory

Based on the latest dataquick reports (6 properties sold in Feburary), Laguna Beach has a huge inventory of homes for sale that would take over 6 YEARS to sell. (Redfin indicates 442 properties are on the market right now)

What does this indicate? More huge price corrections to the downside for Laguna Beach home prices. When nothing is selling, sellers must reduce prices or not sell. No one can fight the market direction. Buying a home now at the typical high asking price would be a stupid, catastrophic decision.

Honey, the neighbors undercut us by $500,000!

I've been following Crystal Cove home prices closely. There are some very disappointed home sellers in Crystal Cove. This probably goes under the category of "the market giveth and the market taketh away." Crystal Cove homes appreciated hugely in the bubble years.

Now is the time for the home values to give it up.

Take 2 Tideline Bluff, for example. Originally listed for $4.5 million, it has been reduced to $3.6 million. This about half way up the hill in Crystal Cove, where homes have been listed in the 4-5 million dollar range. Now, the price cut on 2 Tideline Bluff and the listing price on other homes have made it clear that the $4 million dollar days are gone for good.

Just down the street is 20 Tideline Bluff, listed at $4.8 million. This one is, well, pretty clearly over valued in view of this development. Yet Coldwell Banker is still trying to sell it at this price. What does that say for Coldwell's credibility? Thoughts anyone?

It should be appreciated that the neighbor's price cut really does nothing other than demonstrate that the true market values for these homes have gone down. If the values are down, they are down, no matter what the various asking prices. If either home were worth 4 million dollars, then someone would step up and pay it. Not going to happen because in reality the homes are not worth it.....

Ocean Views - $315 sq/ft in Arch Beach Heights!

I recently noticed that the house at 1420 Del Mar sold for only $832,500, about 50% of the original asking price. It is a 4 bedroom, 2640 square foot home with ocean views. I toured it a while ago.

That works out to $315 per square foot. This is about what Arch Beach homes were selling for in 2002 or 2001.

This is a price point that will attract buyers in Laguna Beach, yet there are plenty of sellers out there who are asking much more, hoping for an ill informed buyer to happen along and get suckered.

Luckily, no buyer gave any credibility whatsoever to the original $1.6 million asking price, as listed by Keller Williams realty. Sorry Keller, no morons bought your perception of "value".....

January Home Sale Prices Crater in Laguna

My prior post on January Laguna Beach home prices was based only on data through January 15.

Well, the last two weeks of January were ***MUCH**** worse.

When all the January numbers from Dataquick were in, the median home price in Laguna Beach was down to $825,000, a whopping 50% decrease over last year. This is single family home data only, and does not include condos.

You know that this means.

No one who is sane is buying any of the overpriced homes on the Laguna Beach MLS. The few sales that did happen? I chalk that up to the "moron" factor - ill informed buyers who have made catastrophic buying decisions.

There has been a drastic step change downward in the true home values in Laguna Beach. The median home prices in Corona Del Mar, Newport and Newport Coast also dropped like lead balloons.

Are there any agents out there who disagree? Sellers? Buyers?

January Sales Numbers Show Huge Price Declines in Laguna, Corona Del Mar and Newport Coast

The "immune" cities are not immune. Price have rolled over and are screaming downward. Lansner's blog has posted Dataquick numbers through January 15.

Laguna Beach median home price - down 23% to $1.176M
Corona Del Mar median home price - down a whopping 50% to $1.25M
Newport Coast median home price - down a whopping 57% to $1.88M

Buying anything but the cheapest condo in these cities carries with it a ton of down side risk. Losing $20,000 to $40,000 per month in home value is one realistic scenario. Any real estate agents out there with any comments? If you go to an open house this weekend, throw these numbers around for mild amusement!

Home Values Plummet in Supposedly "Immune" High End Cities

Recent data shows that home values in SoCal's high end communities only recently began dropping. But the drops are huge. The LA Times has a good article about it. One couple lost $400,000 in only a few months. Laguna beach home prices and Newport Beach home prices are following suit. Uninformed buyers are really at risk. Pound your agent for comps and analyze everything out there before you make an offer. Take the comps and SUBTRACT for the declining market to get to your offer price.

Chapman Forecaster Warns - Buying a High End OC Home Is A Mistake

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 had the pleasure of recently attending a meeting where Adibi was presenting. His presentation was very credible and based on sound analysis. His message? DO NOT BUY a higher end home in OC. These homes will fall a lot in the coming years. For a median price house, Adibi said to buy toward the end of 2009.

I'm standing by watching the Laguna beach home prices decline...........

South Laguna Comp - Big House, Big Lot - $500/sq. ft.

31401 Holly Street finally sold for $1,865,000. This is about a MILLION dollars less than the original listing price. When I was in the property at a time close to the original listing, I told the agent that the thing wrong with the price was .... the "2". As in it should sell for a price of a million dollars less that would instead begin with a "1". Of course, my comment was met with fake shock by the agent, who said something like "Why, this is a good deal even at the asking price! You have to realize what neighborhood you are in."
Uhhhh, yeah. Right.

In the end, it sold for about a MILLION dollars less than the asking price. I'll take my victory lap now. This is now great evidence of the fall in Laguna Beach home prices.

In any event, this is an ocean close/big house/big yard comp for $500 per square foot. It has 5 bedrooms, etc. Had some buyer trusted the outrageously high price originally sought by Coldwell Banker, they would have taken a $1,000,000 bath. Shame shame Coldwell Banker. Take note all.

2626 Victoria Drive Headed Toward Foreclosure

Bluemove documented the failed auction at 2626 Victoria Drive just after Thanksgiving of 2008. Now, Bluemove has discovered that, according to Realtytrac.com, a mortgage default for this property was recorded in early December. This is the first step of foreclosure and this is becoming a more common factor in Laguna Beach home prices.

The highest market price from the bidders at the failed auction was $1,500,000, but this was well below the price the seller would accept. If and when the bank forecloses, perhaps the home will sell for $1,500,000.

How NOT to Lose at Least $500,000 in 2009

As we enter the new year in this receding real estate market, it is hard to predict when the turn around will come. But....one thing I can do after following the Laguna Beach and Newport Coast real estate market for over a year is offer my opinion on what NOT to do.

So here's some invaluable advice that could save you $500,000 in 2009 if you are planning to buy in Crystal Cove, CA.

1. Do NOT buy 100 Sidney Bay Drive for the asking price of $2,495,000. In my opinion, this condo will be worth less than $2,000,000 some time in 2009 (if not now).
Jacquiline Thompson is the listing agent and it is listed on Redfin.com as a condo, not a detached single family residence. The neighboring property at 106 Sidney Bay Drive was, according to realtytrac.com, repossessed in 2008 on a mortgage having a value of roughly $150K less. What does this mean? The market has gone down since then. There's no way in my opinion that 100 Sidney Bay is worth more. Look for 100 Sidney Bay to sell for less than $2,000,000 in 2009, in my opinion.

2. Do NOT buy 88 Sidney Bay Drive for $2,488,888 - it is in the same club as 100 Sidney Bay Drive. Look for the value of these condos to go down significantly in 2009, in my opinion. The same could be said for the other homes in Crystal Cove - they could be positioned for a major hit in 2008, some losing a million or more dollars.