That's exactly what this Laguna Beach owner is hoping to achieve after holding their luxury property for less than two years. Never mind that even this market has shown a few small cracks in recent months (the latest DataQuick figures reveal sales volume is down more than 50% and the median is down about 10% from the same time last year, though these numbers are very volatile).
And, never mind that this property was purchased about as close as it gets to the peak of the Great Housing Boom. Well, with a property this nice, perhaps anything is worth a shot...
14 Lagunita Drive, 92651
Asking price: $16,989,000
Asking price/ sq ft: $3,951
Income requirement: Ridiculously high
Purchase price: $11,000,000
Purchase date: 5/18/06
Size: 4 beds, 5 baths, 4,500 sq ft (built in 1963)
Income requirement: Ridiculously high
Purchase price: $11,000,000
Purchase date: 5/18/06
Size: 4 beds, 5 baths, 4,500 sq ft (built in 1963)
2006 property tax: $71,647
Type: Single Family Residence
Stories: Three or More LevelsType: Single Family Residence
Lot size: 6,370 sq ft
From listing: Lagunita oceanfront residence that is a work of art in itself. Crashing white water and pristine sand at your doorstep with direct steps to Victoria Beach. Panoramic 180 degree oceanviews. Soft contemporary style architecture. Custom teak doors, art glass walls etched with sea life motifs, a copper roof, and climate controlled wine loft that holds approx. 800 bottles.
Obviously, this property is marketed towards a very select group of possible buyers - the all-cash variety, to be specific. Let's look at a portion of the sales history that shows up in Zillow:June 1988: $1,225,000
December 1997: $2,150,000
May 2006: $11,000,000
Taking this information into account, we see it took about nine years for the property to increase in value by 76% between 1998 and 1997. That's a pretty significant amount, but hey, this is a luxury property, so the rules are different. The nominal increase in value between those two sales was $925,000.
Then, between 1997 and 2006, the property increased in value by $8,850,000, or 21.4% per year for a total appreciation of about 412%. We speculate that some significant remodeling took place in order to increase the value by this much, but in a bubble market all bets are off.
The latest owner is gunning for a $5,989,000 profit, not including sales costs. That would equate to an appreciation of about 54% during a horrible housing downturn - now that's bubble immunity if we ever saw it.
If we were to tack on 6% in transaction costs, the profit would "dwindle" to $4,969,660.
5 comments:
Laguna Beach has seen price weakening. The factor that makes it volatile is every month there will be a property that sells for a far higher price than all the other sales that month. For example, median sales for everything but that pricey property is $1.7 million, but the pricey one goes for $6 million.
The property featured here is oceanfront, which is too windy for my taste, even if I had the cash. The property would reap a ridiculous profit, it's at a ridiculous asking price and to top it off, the new buyer would pay a ridiculous property tax. I guess if you're the select few that can afford the price, the property tax would be a drop in the bucket, right?
Lagunita is the worst gated beach front community in Laguna - this house will not sell.
swim - thanks for the update and your analysis.
I found the street name kind of interesting. Good to know it's not one of the best beach-front communities in Laguna.
Check out the latest flipper listing in Laguna.
http://bluemove.blogspot.com/
Sellers continue to wish for high prices.
Swim is so right. It's skewed market because of the stratospheric oceanfront digs that range in the double-digit millions. A big-name realtor told me some of these are purchased by Russian mafia? The tales they do tell around the Southern OC...
Post a Comment