Luxury High-End Homes in Laguna Beach
Update as of 1-2-2010
The Laguna Beach real estate market in chock full of luxury, custom and ocean view properties. Many home buyers have been watching as the general market takes price cut after price cut…but do such price cuts ever occur in a market such as ours, here with Laguna Beach homes?
It was reported by Matthew Woolsey of Forbes.com that owners of luxury, high-end homes have been in denial when it came to the question of whether or not their homes could possibly suffer the same type of financial fate as the broader market. As he stated, “…high-end home buyers were thought to have endless, deep pockets, further insulating the top-tier from the cratering economy.”
But, it seems, that the price insulation eroded after Lehman Brothers failed and Fannie Mae and Freddie Mac’s troubles were viewed in the full light of day and went into government conservatorship.
The real estate market in Laguna Beach has experienced its share of short sales, REOs and “regular” sales that are priced well below what we have seen in the last five years. In some cases, we are looking at homes priced where they were in 2002! And, just like many other real estate markets in Orange County, Laguna Beach homes for sale have their share of “shadow inventory”.
Homes labeled as “shadow inventory” are homes that are in some state of pre-foreclosure or are bank owned properties not yet on the market. The banks understand that when a homeowner becomes late by two or more months on their mortgage payment, the probability of that home becoming a “distressed” property increases. The lenders have a pretty good idea of how many additional homes will be entering our market at reduced prices in the coming months.
So do smart homeowners that want to sell their house now. They understand that in order to compete with the incoming inventory, they must price their homes competitively according to today’s economics and market…not the market of a few years ago. Because of this smart pricing, we are finding some well-priced “regular” sales (meaning that the property or owner is not in a distressed situation).
Just imagine if you could purchase the home of your dreams for what it was priced seven years ago. This was well before the peak of the market.
High-end homebuyers may be believed to have deep pockets, but they also have deep financial smarts. They understand that the right time to buy prime properties, or other smart investments, often comes when others are hesitant. When the price of a home in Laguna Beach gets to the point where it would almost be silly NOT to purchase it, contracts will be negotiated… and they are.
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