Median Laguna Beach Single Family Home Price Plunges to New Low In May

The May numbers are in and the median prices is still plunging downward. According to Dataquick, the median price for a single family home in Laguna Beach in May declined to $985,000. This is the first time I have seen it below $1,000,000.

What does this mean? The high end in Laguna Beach is still weak. The value of these homes is going down or are not selling and this is pushing the median price downward. The trend is down. Be careful if you are buying - factor this into any offers you make.

Real estate agents are, of course, welcome to comment.

Buyers Remorse in Top of World Part II

We've written about the sale of a home on Park Place and how the sale price of $1.62 million didn't compare favorably to some local homes that recently sold.

Well, hold on to your hats for what in my opinion could be a real estate disaster in the making, but first a little information on the Park Place neighborhood.

Park Place is a street of older homes in the family friendly Top of the World neighborhood in Laguna Beach. The homes were built in the 1980's and are well kept, but are hardly custom high end homes. Park Place is like a little slice of 1980's Irvine. If you are a higher end purchaser, this neighborhood will be disappointing. I'm not saying that is bad - I'm just sayin what's what.

Anyhow, back to the home on Park Place. We had earlier wondered why the buyer had paid so much for this home, given the low priced comps that were located very close by. Now, the buyer has put up the poles and ribbons that indicate a complete remodel. OMG, the buyer is putting MORE money into this home just like in the go go days of 2007!

Now, another close house on Park Place is for sale for $1.59 million. No big deal, right? Well, that home is 700 square feet bigger AND IT HAS A POOL. And it may not even sell for the listing price.  So that home on  Park Place is being offered at $457 per square foot. If you value the home sold on Park Place at that price, it is worth, gulp, only $1.295 million. And it doesn't have a pool. Subtract $100,000 for that, leaving you with a value of $1.195 million.

The buyer of the Park Place home took out a loan of $1,200,000 and therefore made a downpayment of $420,000. What happened to the value of the downpayment? Well, it's probably gone. Gone in 2 months. Close escrow on the house in April, gone in June. Be carefule and do your homework before you buy folks!!!!!

Oh yeah, the real estate agents have their commission payments.

Crystal Cove Listing Fail

Recently, 2 Baffin Bay was listed for $2,995,000. Several open houses were held. Much gushing about the extra rooms in this home, which was renovated to add square footage. This was touted as a "GREAT VALUE IN CRYSTAL COVE" Hah. Right.

No sale. Fail. Now being rented out.

What does this mean? This is more evidence of weakness in Crystal Cove. This especially demonstrates the falling home values in the "Seabourne" models on the lower part of the hill. They are all pretty much the same - interchangeable comps. If the listing price was somewhere close to the real market value of this home, it would have sold.

Someone could conclude then that the value of this home is much less than $2.9 million. $2.5 million? $2.4 million? The real value of these single family homes is probably lower than the high priced condo sale that happened earlier in the year. Ooops - wouldn't want to be that buyer. Any thoughts out there?

Laguna Beach Foreclosures Skyrocket - More Downward Price Pressure Coming

The latest data from the OC Register shows a whopping 66% increase in Laguna Beach foreclosures. This means more distressed properties will hit the market. This means downward price pressure. If you buy, buy low so you don't end up underwater on the day you close!

Top of the World - Large Homes Sell at Less Than $400 Per Square Foot

Recent comps in the Laguna Beach Top of the World neighborhood indicate that the price per square foot for these larger family homes has dropped way below $400 per square foot.

3216 Tyrol - $358 sq/ft, sold on February 26, 2010
2556 Temple Hills Drive - $389 sq/ft, sold on April 16, 2010.
2255 Bridge Road - $358 sq/ft, sold on January 8, 2010.

Notably, only a few houses away from 3216 Tyrol is the above home on Park Place, which sold on April 9 for a whopping $571 sq/ft, a total of $1,620,000. There is virtually no difference in the non-ocean views between these two homes. If the Park Place home was valued even at $400 sq/ft, the price would have been $1,140,000. If that valuation is used, it is almost a $500,000 loss the very second the buyer took title to the house. Possibly, they are upside down right now, even before the housewarming party. I wonder if the new buyers were aware of these recent comps? They paid more than the house sold for in 2004, which can be used to judge value. LOL if they have to resell anytime in the coming years!

1130 Summit Drive - A New Low Comp Killer For Laguna Beach Luxury Housing

I've written about 1130 Summit Drive before. It is a newer modern house with ocean views but no ocean access. A rumor posted by a reader on this blog indicate that it has been sold for $2.38 million. If true, this represents a huge reduction from its original list price, which was $5,000,000 in 2007. According to the prior link, it was Lee Ann Canaday trying to get that price from someone. Didn't work.

The sale price would be more than a 50% reduction from the $5,000,000 price that turned out to be completely unrealistic.


All in all, once the sale is confirmed, this will be a comp for Laguna Beach at $496 per square foot. There are a lot of houses out there priced way above that at $700 or $800 or $1000 per square foot. I'd advise a healthy dose of caution when dealing with listing agents claiming homes can be valued at these prices, especially homes with views, but no ocean access. I personally think the buyer paid a little too much, but everyone has their own way to value things.

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.......