Will Someone Please Buy This House? Real Estate Woes In A Declining Market
This is a great time to buy a home. I think I’ve started some past blogs in similar fashion. It hasn’t really caught on, though. People are still taking their money out of the banks, the stock markets, retirement accounts, and putting it…well, I’m not really sure where they are putting it. I know where they aren’t putting it, and that’s in real estate.
Real estate is where to put the money! It would seem reasonable that in this buyers market, people would be coming out to take advantage of all the inventory that is available to them right now. Sure, prices may slip a bit more before the prices actually bottom out, but how much lower can the market go?
If you haven’t already read my bio by now, I specialize in branded resort properties and new home sales. It is a rare opportunity for me to take advantage of open houses in the re-sale market simply because it is not part of my business, but I recently had the opportunity to tour with some Southern California agents to view some of the available re-sale listings of a specific beach community located in Orange County.
Known also as the OC, Orange County lies somewhere in the middle of California between Los Angeles and San Diego, though with a lot less hoopla than LA and a bit more hoopla than San Diego. Complete with beautiful stretches of beach communities, and much sought-after inland cities, the organic feel of Orange County never seems to get lost, even while fighting the traffic to get inside Disneyland, one of the OC’s most visited hot spots.
Though the current real estate market has not been absolutely devastating to this area, it is still not without its scars…some of which will be there for years after the market makes its recovery. In particular, one such area we visited last weekend was a grim reminder of what the market has done to our business.
This particular area, located in a gated community in the city of Laguna Beach, is exactly the area I always wanted to live, but knew in my heart that I would never be able to afford. With approximately 80 homes in total, and two guard gated entrances into the neighborhood, we drove up to an already open gate and an unattended guard house. As we drove through, I couldn’t help but begin to notice the gluttony of ‘for sale’ signs that littered the neighborhood.
The house we were visiting, a French Normandy style, had been on the market for 390 days. With four bedrooms and four bathrooms, 3-car garage, gourmet kitchen and a fenced yard with a black bottom pool, this 3,100 square foot gem was an instant favorite for me. In a neighborhood where home prices peaked at $2.9 million just two years ago, this home was listed at $1.3 million, recently reduced from $1.6 million last month…and reduced three other times over the listing days on market from its original price of $2.4 million.
The listing agent informed me that the empty guard house was a cost saving measure approved by the HOA. He also mentioned that we were his first visitors of the day, which happened to be ending within the next half hour or so. With 19 other listings in the neighborhood, I wondered silently why 25% of the neighborhood was up for sale, of which the last sale occurred nearly four months ago for a similar home at a sales price of $1.53 million.
The next few months will be the real barometer to determine how much lower that market will go. Historically, spring is the prime selling season for that neighborhood, but there have never been more than two homes for sale at any one time in the past. The listing agent, however, is a bit more bullish on the market, citing most sellers in that neighborhood can wait out the market for the right buyer and the right price.
Me? I’m not too sure I follow that logic, especially in light of a $900K price reduction over the last year…but it takes only one to believe real estate is where to put the money.
