Almost gone in Laguna

Gasp! Another luxury property off the market in Laguna Beach. Let's deconstruct this one to see what we find...

2130 Hillview Dr, 92651
Asking price: $1,329,000
Previous sales price: $1,250,000
Previous sales date: 12/11/09

Beds:	4
Baths:	2.5
Sq. Ft.:	3,000
$/Sq. Ft.:	$443
Lot Size:	8,000 Sq. Ft.
Property Type:	Residential, Single Family
Style:	3+ Levels, Contemporary
View:	Canyon, Catalina, Hills, Ocean, Panoramic, Has View, Water
Year Built:	1975
Community:	Laguna Village
County:	Orange
MLS#:	S600818
Source:	SoCalMLS
Status:	Backup Offers Accepted This listing is under contract, but the sellers are looking for additional offers in case the current offer falls through.
On Redfin:	33 days

From listing: Prime Laguna Location. Estate Style Privacy at the end of a Cul De Sac. Awesome surrounding views of the Ocean, Hills, and Canyon. A short distance to Downtown Laguna! 4 spacious bedrooms, A lovely Kitchen and Den with Sitdown Ocean Views. Large wrapping decks View decks, and a Private Courtyard W/ views from the Spa! There's also a separate Guest Cottage above the Garage. Close to all 3 Schools. MUCH MORE!!!

We're going to assume this isn't an REO, and check out the sales history. Redfin says this property sold for $351,500 in 1993, and again in 2005 for $1.57 million.

That means, the property went up in value by a factor of about 4.5 in 12 years. But now, if we're led to believe that the property can and will go for the last asking price of $1.329 million, it means the decline since the peak is about 15% for this property.

Nothing's changed in Laguna

This Laguna Beach listing is an interesting commentary - the seller believes that a house that was "totally rebuilt" at the peak of the market should command the same price as was spent then, sans post-bubble pricing adjustment.

23 Emerald Bay, 92651
Asking price: $4,800,000

Beds:	3
Baths:	2.75
Sq. Ft.:	2,711
$/Sq. Ft.:	$1,771
Lot Size:	6,200 Sq. Ft.
Property Type:	Residential, Single Family
Style:	Two Level, Mediterranean
View:	Coastline, Ocean, Panoramic, Park/Green Belt, Water, White Water
Year Built:	2006
Community:	North Laguna
County:	Orange
MLS#:	L30699
Source:	CARETS
Status:	Active
On Redfin:	77 days

From listing: House totally rebuilt in 2006. Very nice. View looks directly at Emerald Bay beach and the ocean. View cannot be blocked. Total house square footage including decks and garage is 3389 per plans.

Leave it to Emerald Bay to kick the housing bubble. There is some serious wealth in this area, but we're not sure how you would make the argument that this property is obviously worth $4.8 million while this one should be $4.5 million. At these kind of dollar amounts, it's really all about personal preference. You can expect that all the houses at this price to be nice and have nice views.

Assuming the property can be sold for the current asking price, it would mean the property has appreciated 422% in about a decade considering that it went for $920,000 in 1998. That's a rate of about 38% per year every year - pretty nice! Of course, the question is raised that if the house had not been totally rebuilt, it would not likely be worth the same amount today. So, if the sellers can find someone to pay their price, we would reason that they're coming out a winner.

Winners, now a loser in Laguna

Bad timing can kill you, even if you're dealing in luxury Laguna Beach real estate.

22191 Rico Rd, 92651
Asking price: $2,190,000
Previous sales price: $2,100,000
Previous sales date: 2/4/05

Beds:	3
Baths:	4
Sq. Ft.:	3,286
$/Sq. Ft.:	$654
Lot Size:	6,180 Sq. Ft.
Property Type:	Single Family Residence
Style:	Mediterranean
Stories:	3+
View:	Canyon, City Lights, Coastline, Ocean, Has View, Water
Year Built:	1989
Community:	South Laguna
County:	Orange
MLS#:	U9003417
Source:	SoCalMLS
Status:	Active
On Redfin:	68 days

From listing: This exquisite custom Mediterranean Villa is located within a tranquil setting, and is merely a stone s throw of everything Laguna has to offer, including fabulous dining and shopping, galleries, cultural events and the world famous Montage Resort. Revel in approximately 3,286 square feet of elegance with panoramic ocean, and coastline and views. From its soaring entry with sweeping staircase and tranquil fountain, this home evokes old world charm and grandeur. The home features private verandas and patios with a spa at the top level. Amenities include a wine cellar, exercise room and a study with wet bar. Vaulted ceilings and custom French doors throughout add to the charm, making it a true entertainer s delight!

Let's take a look at the sales history:

2005: $2,100,000
2002: $1,410,000
1999: $1,195,000
1996: $810,000

Let's look at the change in price between each of these sales:

2005: +$690,000
2002: +$215,000
1999: +$385,000

That's a pretty darn good track record when you consider the short amount of time between each of these sales. The current owner won't be so lucky, however. This property is listed as a short sale for the current asking price of $2,190,000 despite the fact that it's priced above the 2005 sales price.

A great deal in Laguna!

A great deal that is, if you'd like to rent this Laguna Beach property instead of own it. At least, it's a great deal compared to the asking price. Hmm...maybe the asking price is just flat out of whack. See what you think...

820 La Vista Dr, 92651
Asking price: $1,469,000
Previous sales price: $1,296,500
Previous sales date: 7/24/09

Beds:	3
Baths:	2
Sq. Ft.:	-
Lot Size:	6,550 Sq. Ft.
Property Type:	Single Family Residence
Style:	Cottage
Stories:	1
View:	Catalina Island, City Lights, Ocean, Panoramic, Treetop
Year Built:	1956
Community:	Laguna Village
County:	Orange
MLS#:	L30869
Source:	SoCalMLS
Status:	Active
On Redfin:	19 days

From listing: Location, location, location! A three bedroom home with a view of Catalina and the city close to Laguna Beach High School, Anneliese Pre-school, tennis courts, swiming pool, stores, restaurants, beaches; all walking distance away. The home is on a quiet Cul-de-Sac and has a THREE car garage! Plans for a second story, approved by Design Review Board, soft contemporary design are included. This home offers quiet solitude and the proximity to action as well. What a bargain!! Seller financing available! Also offered for the lease @ $3,250.00 per month

Based on the previous sales date and the fact that this one is not listed as an REO, we would also seem to be in the midst of an attempted flip .... and a profitable one based on the current asking price and assuming no renovations were done.

Either way, it's interesting to see how the rental asking price compares to the for sale asking price. If we were to assume $3,250 is the "real" value of this property that a renter would be willing to pay each month to live here, the house "should" be worth about $585,000 based on an estimated target GRM for an owner-occupant of 180. We used 180 instead of the typical 160 because we're building in the fact that we would guess an owner would be willing to pay a bit more to own in Laguna Beach.

Let's just say the asking price is a tad above that.

Laguna cottage, '03 prices

We're going back to Laguna Beach today for an interesting property that just hit the market.

Beds:	4
Baths:	2
Sq. Ft.:	2,200
$/Sq. Ft.:	$363
Lot Size:	7,905 Sq. Ft.
Property Type:	Single Family Residence
Style:	Craftsman
Stories:	2
View:	Canyon, Hills, Trees/Woods, Has View
Year Built:	1944
Community:	Laguna Canyon
County:	Orange
MLS#:	L30596
Source:	SoCalMLS
Status:	Active
On Redfin:	1 day

From description: Laguna Beach's Best Kept Secret! This quintessential Laguna Beach style home has beautiful sprawling grounds with gardens, private patios, beautiful views and ocean breezes. In addition to the home's wandering paths, this home boasts an artist's workshop and a tranquil setting that is hard to find in the hustle and bustle of the active Southern California Lifestyle. When you think it can't get any better, it does! Even though you are in the perfect zen setting, you are an easy walk to town, the Sawdust Festival, Pageant of the Masters, fine dining, boutiques, Main Beach and so much more! Don't miss your opportunity to own this gorgeous home with large windows to absorb all the natural beauty that surrounds this property in a one-of-a-kind community with award winning beaches and Blue Ribbon schools that can only be found here in Laguna Beach...and all this at an affordable price!

How would you value this property? Does the artist's workshop do it for you? What if you would rather have all the modern amenities and granite counters instead of a crafstman cottage?

If you're interested, there will be an open house on Saturday and Sunday between 1 and 4 p.m. The listing does not considering this a short sale, so we won't either. We are told, however, that this property last sold for $825,000 in late 2003.

Assuming the house sells for the full asking price, and we factor in 6% for sales costs, the loss would be $73,940.

Off base in Laguna?

We're hoping your weekend went as well as ours did. Sometimes it's those homemade family meals that taste best of all. Today's property in Laguna Beach is both for rent and for sale, so the question is: Would you like to buy or rent?

2175 Hillview, 92651

Beds:	4
Baths:	3
Sq. Ft.:	-
Lot Size:	7,000 Sq. Ft.
Property Type:	Single Family Residence
Style:	Contemporary
Stories:	3+
View:	Canyon, Catalina Island, City Lights, Coastline, Hills, Ocean
Year Built:	1975
Community:	Laguna Village
County:	Orange
MLS#:	L29639
Source:	SoCalMLS
Status:	Active
On Redfin:	101 days

From description: Great Catalina and Oceanviews! Beautiful, multi-level 4 bedroom home with all the extras. Family room, dining room, detached den office with a private entrance. Living room opens to a large oceanview deck and overlooks a large professionally landscaped yard with room for a swimming pool or spa. Quiet cul-de-sac street, walking distance to Thurston Middle School,the community park and hiking trails. Owner will consider a Lease Option or a 12 month lease, property is now vacant.

This property last sold for $1,317,500 in early 2004. Now, it's up for sale for $1,775,999 after originally being listed for the crazy wishing price of $1,849,000.The current price is about $73,000 below the original asking price.

If you like the property but aren't sure you'd like to drop all that dough, you could instead rent it. It's also up for rent on the MLS asking $5,975 per month. Here's the listing description: "Beautiful 4 bedroom oceanview home with catalina and hillside views. Multi-level home with all the extras,living room, family room, dining room, detached home office with a private entrance.Living room opens to a large oceanview deck overlooking a large, professionally landscaped yard. Quiet, cul-de-sac street, walking distance to thurston middle school, alta laguna park and hiking trails.Tremendous inside, outside living surrounded by beautiful hawaiian garden landscaping.Property is now vacant."

We're not going to assume that an owner-occupant would necessarily target a 160 GRM to own this property, because this type of home would naturally have a premium over renting. So, if we were instead going to estimate value based on a GRM of 185, the rental asking price would dictate the owner-occupant would try to get this for $1,105,375. That's about $670,624 above our target price.

Based on that math, we'll rent the place for a year and enjoy those same ocean views for a lot less dough. What would you do?

'02 rollback in Laguna Canyon?

Surely we jest - a near 2002 rollback in the city of Laguna Beach? It just may be correct - provided the short sale can go through, that is.

21398 Stans Lane, 92651
Asking price: $525,000
Asking price/ sq ft: $493
Purchase price: $515,000
Purchase date: 8/5/02
Size: 2 beds, 1 bath, 1,064 sq ft (built in 1965)
MLS: S573581 (49 days on Redfin)
Type: Single Family Residence
Style: Bungalow
Stories: 1
Lot size: 7,480 Sq. Ft.
From listing: From CA-133 turn east onto Sun Valley Drive then turn left to stay on Sun Valley Drive then turn right on to Stans Lane to 21398 Stans Lane, Laguna Beach, CA. 92651

The Redfin history says this property went for $375,000 in 2001 and then $515,000 in 2002. Whatever the actual details, since it's a short sale we know the debt on the property will not be exhausted if there is a sale. It's up to the bank to decide - is it 2002 again in Laguna Canyon?

$385/sq ft in Laguna

This Laguna Beach property has seen quite a swing in a relatively short amount of time. Right now, it's on the market as a short sale. As you'll see, it's also a bit different than your average single family house...

437 Cypress Dr, 92651
Asking price: $1,929,000
Asking price/ sq ft: $385
Purchase price: $1,740,000
Purchase date: 3/26/07
Size: 10 beds, 8.75 baths, 5,009 sq ft (built in 1937)
MLS: L26112 (429 days on Redfin)
ZipRealty price tracker: Price Reduced: 05/22/08 -- $2,700,000 to $2,695,000
Price Increased: 12/08/08 -- $1,995,000 to $1,999,000
Price Reduced: 05/18/09 -- $1,995,000 to $1,949,000
Price Reduced: 05/27/09 -- $1,949,000 to $1,929,000
Type: Single Family Residence
Style: Cottage, Craftsman
Stories: 2
Lot size: 6,000 Sq. Ft.
From listing: BACK ON THE MARKET AS A SHORT SALE! PRICE REDUCED! North Laguna historic charmer, close to downtown! THE PROPERTY APPRAISED FOR $2,700,000 IN OCT 2007. Short walk to beach, galleries, shops, restaurants, art museum, and movie theatre. Home ideal for owner desiring extra income, or with in-laws or nanny. Main residence has 4 bedrooms(3 upstairs and 1 downstairs)4 baths, office, bonus room. Newly remodeled kitchen: granite counters, Kitchenaid stainless steel appliances, Subzero refrigerator, Thermidor 6 burner professional range & oven. Rare 5 income producing units in the rear: One spacious 2 Bd/1 ba, and 4 studio/1 ba units. Fully occupied. Upper units and main house have ocean views. Partially remodeled. Units have new hardwood floors, kitchens with new appliances, cabinets, and granite countertops. Separate office and community laundry in rear.

As the description states, this is actually an income-producing property (theoretically), along with a larger main house where the landlord could live. If you instead want to simply use this as your own place, you'll first have to honor the existing leases.

The owner tried to make a fast buck in December 2008 by placing the property up for sale for almost $1 million more than they had paid for it in early 2007. Not happening. Now, the asking price has been reduced by 29% and it's a short sale.

Assuming the house can be successfully sold for the current asking price, and we take off 6% for sales costs, there would still be a gain. So, it's safe to assume there is more debt on this property than first meets the eye.

Surprise! Laguna preforeclosure

This Laguna Beach mansion in Emerald Bay shows virtually no signs of being a "typical" danger property for foreclosure, if there is such a thing: Last sale well before the bubble (though it appears the previous sale was only for the land); a level of debt that's nowhere close to some of the biggest abusers out there; and the asking price is way, way enough to cover the loans we see on the property plus plenty more.

Yet, here we are. ForeclosureRadar tells us this one is in default.

541 Emerald Bay, 92651
Asking price: $6,250,000
Asking price/ sq ft: $1,250
Purchase price: $1,200,000
Purchase date: 9/29/98
Size: 4 beds, 4.5 baths, 4,999 sq ft (built in 2000)
MLS: L28980 (93 days on Redfin)
Zillow Zestimate: $3,582,500
HOA dues: $650
Type: Single Family Residence
Style: Cape Cod
Stories: 3+
Lot size: 5,300 Sq. Ft.
From listing: EMERALD BAY - 4 Bedroom - 4.5 Bath. Beautifully appointed Eastern Seaboard influenced custom residence with Fantastic White Water & Panoramic Ocean Views. Built New in 2000, street to street corner lot location with Separate Master Suite with View Terrace. Family Room plus separate Bonus Room. Not a better way to live the Emerald Bay lifestyle!

This begs the question - how much cash did the owners go through to build this property considering they can't pay off the $1.85 million first loan from Union Bank of California? According to our sources, a notice of default was filed in March for $40,946.

For the record, Foreclosureradar.com also shows a $750,000 second as well, for a total of $2.6 million.

Of course, a quick sale for a hefty amount will probably alleviate all the issues. But we'd be hard-pressed to think there are that many buyers around who are in the market to pony up $6 million plus for some coastal real estate. So far, it's been three months on the market and counting.

Is this really happening in Laguna?

Props to the OC Register's South Coast Homes blog for coming across this Laguna Beach property. Here's the summary: the house is a $9.5 million short sale. It's also a preforeclosure, as we'll show you today...

24 Lagunita Drive, 92651
Asking price: $9,495,000
Asking price/ sq ft: $1,315
Purchase price: $5,500,000
Purchase date: 8/31/00
Size: 5 beds, 5.5 baths, 7,220 sq ft (built in 1983)
MLS: S564400 (52 days on Redfin)
ZipRealty price tracker: Price Reduced: 03/10/09 -- $11,990,000 to $9,900,000
Price Reduced: 04/06/09 -- $9,900,000 to $9,495,000
Zillow Zestimate: $4,895,500
HOA dues: $140
Type: Single Family Residence
Style: Contemporary
Stories: 3+
Lot size: 8,580 Sq. Ft.
From listing: AN INCREDIBLE OPPORTUNITY FOR A LAGUNA BEACH, 'OCEAN FRONT' RESIDENCE! ON THE SAND, LOCATED IN PRESTIGIOUS LAGUNITA! CUSTOM HOME WITH 5 BEDROOMS AND 5.5 BATHS! PANORAMIC OCEAN VIEWS FROM NEARLY EVERY ROOM! ELEGANT MASTER SUITE ON TOP LEVEL WITH FIREPLACE, RETREAT & LUXURIOUS BATH! ENTERTAINMENT ROOM WITH WAT BAR! GOURMET KITCHEN WITH CUSTOM CABINETS, GRANITE COUNTERS AND CENTER ISLAND! LIGHT AND BRIGHT WITH VAULTED CEILINGS AND LARGE VIEWING WINDOWS! ADDITIONAL AMENITIES AND UPGRADES INCLUDE...CUSTOM LIGHTING, 2000 SQ FT MASTER SUITE, INFINITY EDGED SPA, BEACH FRONT TERRACES, 4 QUEST SUITES WITH LIMESTONE BATHROOMS, WALKING DISTANCE TO THE MONTAGE RESORT AND SPA, 24 HR GATED COMMUNITY, AND MORE!! TROPICAL LANDSCAPING AND CUSTOM HARDSCAPE! MUST SEE!

There were a total of $11 million worth of loans made against this property in 2007 - one for $10 million in August, and another for $1 million in September. The $10 million loan is currently in default and also is the reason this property is a short sale.

The notice of default - which came in March - is for more than $240,000. Yikes. Who said the rich are all truly rich?

There's not much to be learned here, except that $10-million loans can come back to get you if you're not careful. We don't know who made the loan, but we can guess they're seriously regretting the decision right about now.

REO Laguna cottage

How would you like to pay $850 per square foot to own a small renovated cottage in Laguna Beach? We know, it's all about location.

The bank was hoping to get $999 per square foot up until recently, so consider today's price a deal!

1641 Glenneyre St, 92651
Asking price: $849,900
Asking price/ sq ft: $850
Purchase price: $1,162,906
Purchase date: 12/12/08
Size: 2 beds, 2 baths, 1,000 sq ft (built in 1922)
MLS: P676524 (32 days on Redfin)
ZipRealty price tracker: Price Reduced: 03/09/09 -- $999,000 to $849,900
Zillow Zestimate: $1,066,545
Type: Single Family Residence
Style: Cottage
Stories: 1
Lot size: 2,500 Sq. Ft.
From listing: PICTURE PERFECT BEACH COTTAGE with a peek a boo view! Extensively remodeled top to bottom! Gorgeous private courtyard with custom fireplace, landscaped with lighting and water fountain. Covered patio area that has a built in ladder to climb and sit to enjoy the Ocean View! Remodel includes: distressed hickory hardwood floors, master bedroom and bathroom with private entrance. Master bath with drop in spa tub and skylight, 2nd bath has frameless glass doors with travertine shower and granite sink top. Gorgeous! Gourmet kitchen with granite counters, breakfast bar, micro/convection oven, stainless Range & appliances. Seperate Breakfast Nook. New Furnace & A/C. Over 1500 Sq. Ft of inside/outside living space! Ocean & Catalina Sunset rooftop views!


View Larger Map

The remodel appears to have turned out very well. We're trying to picture the type of person who would have the money and the desire to buy this property: Empty nesters who want to settle on the beach? Successful bachelor/bachelorette who doesn't need very much space and wants a ready-to-move in property close to the water?

The previous owner - whose primary residence is in another South OC city - paid $1,107,000 in 2005 using 100% financing from American Home Equity Corporation in Irvine. He later refinanced into about $1.25 million worth of loans in July 2006.

By late 2007, the parade of notice of defaults began. The house went back to the bank in December 2008.

Assuming the property sells for the current asking price, it would represent a decline of $257,100, or 23% off the 2005 bubble price.

Holdin' the bag in Laguna

Short sales seem to be everywhere these days. Try a before-and-after search on Redfin, once including short sales, and again with short sales excluded, and you'll see what we mean. They're also moving into more expensive areas as well.

Here's one in Laguna Beach that demonstrates very unfortunate timing by the current owner...

600 Loretta Drive, 92651
Asking price: $1,488,888
Asking price/ sq ft: $522
Purchase price: $1,908,500
Purchase date: 3/9/07
Size: 3 beds, 2.5 baths, 2,850 sq ft (built in 2001)
MLS: L27577 (133 days on Redfin)
ZipRealty price tracker: Price Reduced: 11/21/08 -- $1,750,000 to $1,690,000
Price Reduced: 12/17/08 -- $1,690,000 to $1,665,000
Price Reduced: 12/28/08 -- $1,665,000 to $1,599,000
Price Reduced: 01/14/09 -- $1,599,000 to $1,569,000
Price Reduced: 01/29/09 -- $1,569,000 to $1,488,888
Zillow Zestimate: $2,109,500
Type: Single Family Residence
Style: Modern
Stories: 2
Lot size: 9,500 Sq. Ft.
From listing: Stunning and elegant custom home with ocean views! - Expansive living room boast vaulted ceilings, gorgeous fireplace and ocean view. Expansive Gourmet kitchen with large center island with built-in range, top of the line appliances and granite countertops and grand walk-in pantry. Master suite with ocean view, walk-in closet and large private bathroom with spa tub. Home is situated on corner lot, not far from local beaches, shopping and schools.

The mass of 8s in the asking price is probably not a coincidence. The views look stunning. Unfortunately, so do the price drops.

The original asking price was $1.75 million - already a fairly significant amount less than the sales price in early 2007. Now, five price reductions later, the current asking price is $261,112 lower than the current owner tried to sell for when they put the house up for sale a few months ago.

The real winner in this situation was the previous owner. They bought in 2003 for $1,060,000 and then sold four years later for $1,908,500. Huge profit, great timing.

The current owner's bad timing would equal a loss of $508,945.28, including 6% sales costs and assuming the house can sucessfully be sold for the current asking price. At least some would have to be absorbed by the lender. How much, we don't know.

Not including any sales costs, if the house is sold right now for its latest asking price it would be a depreciation of 22%.

Yes, a short sale like this is pretty rare in Laguna, but it's not the only one. Here's another on Katella Street - sold for $1,790,000 in 2006, now on the market for $1,299,999.

Flip out in Laguna

Today's property is proof people are trying to make a killing buying and then reselling homes in Laguna Beach's Three Arch Bay. Will the $1.7 million investment pay off?

3 S Portola, 92651
Asking price: $2,149,000
Asking price/ sq ft: $1,194
Purchase price: $1,700,100
Purchase date: 5/13/08
Size: 3 beds, 2 baths, 1,800 sq ft (built in 1945)
MLS: S561062 (5 days on Redfin)
HOA dues: $170
Type: Single Family Residence
Style: Other
Stories: 1
Lot size: 6,240 Sq. Ft.
From listing: Single level in private Three Arch Bay! Enter the spacious living room to find hardwood floors and a cozy fireplace. New paint and refinished hardwood floors. Upgraded kitchen with stainless steel appliances and the center island features smooth granite counters. Charming breakfast nook with french doors. Niche features a built-in desk. Grassy front yard, shuffle board in backyard.

Not sure why there are only 2 pictures to go along with a $2 million-plus listing. Really not sure why the second is a grainy cell phone pic.

To be fair, it's not for certain this was a planned flip, considering Redfin says the home last sold in May 2008 - that's a really long time between previous sale and flip. Perhaps the owner meant to live here long term, and extenuating circumstances are forcing them to sell. They just happened to think the house has appreciated 26% since last year, after their upgrades are taken into account.

We do know the current owner appears to have gotten a very good deal on this property - 2003 rollbacks in Laguna are very rare right now unless they're foreclosures or short sales.

Assuming a sale for the full asking price, and we subtract 6% for sales costs, the potential profit is $319,960, before subtracting for upgrades and other expenses.

Trouble coming to the coast?

Above is the ForeclosureRadar map of part of Laguna Beach. According to the site, there are 71 properties in Laguna at some stage of the foreclosure process. That number represents a very small percentage of houses there, as you would expect with a luxury area.

But, we have noticed more short sales (though many are not going through foreclosure) creeping up in recent months. Today's property happens to be a Laguna preforeclosure.

575 Center Street, 92651
Asking price: $1,399,000
Asking price/ sq ft: $666
Purchase price: $870,000
Purchase date: 10/20/00
Size: 3 beds, 3 baths 2,100 sq ft (built in 1961)
MLS: L26516 (218 days on Redfin)
ZipRealty price tracker: Price Reduced: 7/08/08 -- $1,699,000 to $1,595,000
Price Reduced: 7/28/08 -- $1,595,000 to $1,450,000
Zillow Zestimate: $1,696,500
Type: Single Family Residence
Style: Craftsman
Stories: 2
Lot size: 5,826 Sq. Ft.
From listing: Woods Cove home with ocean view and great yard.This home was completly remodeled two years ago with stainless steel appliances,granite conter tops, all new hardwood floors, bathrooms are all new with walk in closets. Huge 900 sq. foot deck that makes this place a entertaiment dream. This home was 4 bedroom and can be converted back if needed. Total private street with large grassy yard, which makes this home a rare commodity so close to woods cove beach. This home will not last.


View Larger Map

"This home will not last"... and yet it has for many months. How can there be a handful of obvious typos in a $1.4 million listing?

The current owner used an 80% loan from BofA when she bought the property in 2000. Barring an unforeseen loss of income, she shouldn't be in the situation she's in now. But, in 2005, she took out $1.54 million worth of loans against the property.

The first loan for $995,000 is in default. The notice of trustee sale was filed in mid-December - for more than the original loan amount.

Despite the fact that the property last changed hands nine years ago for less than $1 million, if it sold for the current asking price of $1.399 million, and we subtracted 6% for sales costs, the actual loss would be more than $220,000.

It's Thanksgiving Eve!

Did anyone know there was such a thing as Thanksgiving Eve? My wife and I found out a year ago today when we tried to go to Panera for dinner and found out they all closed early because of "Thanksgiving Eve."

Either way, it's important to take this time to remember how lucky we all are. I personally am thankful to still have a job (knock on wood) in this rough economy that is decimating a growing number of industries. It is certainly a season - and year - for being generous and helpful where one is able.

Here is a property in Laguna Beach that the current owner took for all it was worth (plus some). Now it's a short sale and preforeclosure. Notice the difference between the previous sales price and current asking price. The carnage is actually worse than it seems.

1235 Cerritos Dr, 92651
Asking price: $799,000
Asking price/ sq ft: $363
Purchase price: $1,280,000
Purchase date: 5/23/05
Size: 3 beds, 2 baths, 2,200 sq ft (built in 1965)
MLS: L28151 (1 day on Redfin)
Zillow Zestimate: $1,687,500
Type: Single Family Residence
Style: Other
Stories: 2
Lot size: 9,159 Sq. Ft.
From listing: **SHORT SALE** FABULOUS DEAL! LOWEST PRICE IN ALL OF TEMPLE HILLS! Fixer condition. Expansive canyon views. Open living room, large family room each with its own fireplace. Two Master Suites. Large lot. Large rear patio and large yard area. Potential for 3rd level on lower portion.


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The current owner bought the property at the peak using 94% financing from Nationpoint (an imploded lender). They put $80,000 down and financed $1.2 million.

In July 2007, there was a refinance into a $1.492 million loan from Bank of America. About six months later, the owner tacked on a $237,500 second loan, also from BofA. That second loan is the one that is now in default.

The notice of trustee sale amount on the loan is $244,327. Since this property is classified as a fixer in the listing description we assume the money didn't go into the house.

We would assume the asking price is probably artificially low to incite a bidding war. It's also likely to be below what the lender would allow a sale for.

But, if we were to pretend it sold for the current asking price and we took off 6% for sales costs, it would mean a loss of somewhere around $975,000 - all for BofA.

Laguna Beach foreclosure tour

You may have noticed the OC Register recently profiled the fact that Laguna Beach (gasp!) has foreclosures of its own. Thanks to reporter Kelli Hart for getting the story out there.

The story listed six active foreclosures in the 92651 ZIP code (along with others in various stages of the process). We're going to expand on some of the ones currently for sale on the MLS for you here.

From the Register (the part in quotes):
"1363 Morningside Drive. Details: 1,943 square feet, two bedrooms, two bathrooms, panoramic ocean views. Original price: $859,900. Current listing price: $859,900."
Our additional info (from ForeclosureRadar): 'Twas the financing that did this one in. The owners had $902,250 of debt on this property in 2004, but within about a year and a half, it could have been as high as about $1.2 million. Back to the bank in early September for $929,685.

"1420 Del Mar Ave. Details: about 2,640 square feet, four bedrooms, four bathrooms, ocean view. Original price: $1,055,000. Current listing price: $995,000."
Additional info: It looks like the previous owner bought a flipped property for $1,364,500 in August 2006 using 90% financing from Indymac. He then added a $500,000 loan two months later, so total debt on the property was somewhere near $1.7 million. Two loans - the $1 million first loan, and the $500,000 loan, both were in default by February 2008.

"1730 Thurston Drive. Details: about 2,000 square feet, three bedrooms, three bathrooms, canyon view, ocean view. Original price: $1.4 million."
Additional info: This property went back to the bank...in 2004. Then, it did again in July 2008. The strange thing is there wasn't too much financing in this property. ForeclosureRadar says the previous owner took out a $308,000 loan from Wells Fargo in 2004, and then a $450,000 loan in 2006.

"2938 Rounsevel Terrace. Details: about 2,700 square feet, three bedrooms, four bathrooms, ocean view. Original price: $2.65 million. Current listing price: $2.35 million."
Additional info: This property is pictured at the top of the post, and it looks awesome. The previous owner paid $1.55 million in November 2005. In January 2006 she refinanced into $1.7 million worth of loans. Uh oh.

Rollback in Laguna...still $740/sq ft

The owner of this Laguna Beach property is trying to get $740 per square foot for their home. Laugh if you'd like, but it's actually more than $100 per square foot lower than the past seven sales there have fetched. But even at that premium, it's well below what they paid in 2006.

31914 9th Ave, 92651
Asking price: $799,000
Asking price/ sq ft: $740
Purchase price: $1,020,000
Purchase date: 2/21/06
Size: 3 beds, 2 baths, 1,080 sq ft (built in 1928)
MLS: L26582 (136 days on Redfin)
ZipRealty price tracker: Price Reduced: 7/15/08 -- $969,000 to $929,000
Price Reduced: 7/28/08 -- $929,000 to $899,000
Price Reduced: 10/10/08 -- $899,000 to $849,000
Price Reduced: 10/17/08 -- $849,000 to $799,000
Zillow Zestimate: $1,176,000
Type: Single Family Residence
Style: Craftsman
Stories: 2 Levels
Lot size: 1,860 sq ft
From listing: Enjoy sunsets and ocean views from this charming beach cottage. Just one block from the beach. Corner lot and plenty of parking. Upstairs consists of 2 bedrooms, 1 bath, kitchen, living, wonderful fireplace and ample deck space. Downstairs is separate guest quarters with separate entrance, patio. Fenced yard with nice landscaping and expansive patio. Lots of storage and generous work area.

Customized financial info:
Minimum Income Requirement (using 30Y Fixed): $162,000, assumes no other debt/obligations.
Downpayment needed: $119,875
Monthly Payment on 30Y Fixed at 6.25% with property taxes and insurance estimated: $5,726.72
Minimum Income Requirement (using 5Y fixed): $156,000, assumes no other debt/obligations.
Monthly Payment on 5Y fixed at 5.80% with property taxes and mortgage insurance estimated: $5,515.53
Disclosure: All rates offered to the client with 1 point cost. Rate quotes assume a purchase transaction with the required minimum down payment, 720 credit score, full income qualification and required reserves. Rates are subject to fluctuation. Custom rate quotes and rate lock advice are available by visiting www.thegreatloan.com.

We used to live in a property roughly this size. It eventually got a bit cramped, and it only had one bedroom and a den. How would a property like this feel with three bedrooms? For this much money? Ahh yes, one block from the beach. 'Nuf said.

There have been four price reductions since the house came onto the market in June for a total of $170,000 off the original asking price. Assuming the home can be sold for the current price, it would mean a loss of $268,940 off the 2006 price, including 6% sales costs. It also would be a 22% depreciation off the previous sales price. Are we now beginning to see a slow unwinding of the high end?

Long-coming Laguna update

A reader alerted us that 1089 Miramar - a property we mentioned a long ways back in a post about whether Laguna Beach is actually immune from the aftereffects of the real estate bubble - has sold.

Only took about 10 months. Previous sales price in 2005 was $1,195,000. This is what the listing description said:

Value....Value....Value....Expansive Ocean Views!!! Complelety Remodeled And Updgraded. Dramatic Gourmet Kitchen, Granite Travertine Flooring, Custom Fireplace And Open Living Area Highlights This Laguna Beach Residence. Wrought Iron Railing,Dark Wood Stairs & Cathedral Ceilings Add To The Ambience Of This Property. Bathrooms Feature Custom Touches Including Tumbled Marble. Enjoy Outdoors On The View Deck And Private Backyard.

Redfin says the sales price this time was $1 million - 16% off the previous sales price.

Preforeclosure in Laguna Beach

The marketer behind this Laguna Beach ocean-view property is trying to turn some sizable negatives (possible future foreclosure; remodeling incomplete) into positives (blank slate to make your own).

Will the plan succeed? Is the property priced well enough relative to its value to save itself from the foreclosure auction?

928 Quivera, 92651
Asking price: $1,050,000
Asking price/ sq ft: $503
Income requirement: $262,500
Purchase price: $1,300,000
Purchase date: 9/14/06
Size: 2 beds, 2 baths, 2,087 sq ft (built in 1988)
MLS: L26869 (28 days on Redfin)
ZipRealty price tracker: Price Reduced: 8/04/08 -- $1,150,000 to $1,050,000
Type: Single Family Residence
Style: Contemporary
Stories: 3+ Levels
Lot size: 2,500 sq ft
From listing: NOTICE OF DEFAULT,BEAT THE BANK. Home was in the process of being remodeled. This is a blank slate for the new owner design their dream kitchen and master bedroom most of the plumbing and electrical work has been done The home has great ocean views from upper balcony and a very private rear terrace. Home could have 3 bedrooms. This is a great opportunity for your investor and creative buyers.


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As you may have noticed from the sales history on the Redfin listing, this property has changed hands a number of times over the past few years. The current owners put $140,000 down and financed the remaining 87% with the help of First Franklin.

They are now in severe danger of losing the downpayment, but the lender also will feel the burn. The property first went up for sale in mid-July asking $1,150,000 - this was about a month after a notice of default had been filed on the property for $21,195.

The price was lowered to the current amount a few days ago.

Assuming the property can successfully be sold for the current asking price, it would mean a loss of $313,000, including 6% sales costs. The downpayment would be history, and the lender would be out around $173,000.

Laguna Beach is holding up well, but it's far from perfect...

"Shouldn't be" short sale in Laguna

This Laguna Beach property is not the "bought at the peak and is now upside down" type of short sale. It's the other kind - when refinancing and mortgage equity withdrawl come home to roost.

533 Lombardy Lane, 92651
Asking price: $799,000-$849,000
Asking price/ sq ft: $695
Income requirement: $212,250
Purchase price: $494,045
Purchase date: 9/20/00
Size: 2 beds, 1 bath, 1,150 sq ft (built in 1927)
MLS: S515870 (209 days on Redfin)
ZipRealty price tracker: Price Reduced: 3/11/08 -- $899,000 to $849,000
Zillow Zestimate: $1,072,000
Type: Single Family Residence
Style: English
Stories: 2 Levels
Lot size: 1,800 sq ft
From listing: APPROVED SHORT SALE!!! LOOK AT THE PRICE ON THIS SFR IN HIGHLY SOUGHT-AFTER LAGUNA BEACH!!! The last word in style & charm this unbelievable home is tucked on a quiet street in great neighborhood. A perfect 10 in curb appeal you will fall in love with this great home from the moment you see it. Dramatic living room entrance showcases rich hardwood flooring, exposed beams, custom lighting & massive brick fireplace with elegant oversized mantle. Nifty chefs' kitchen with clean tile countertops, garden window & access to formal dining area. Main floor bedroom - a great perk! Other great features include: large office/den + enormous loft - an easy 2nd/3rd bedroom! This home will not stay on the market long - totally turnkey and priced to sell fast! WOW!



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As you can see from the purchase price, this property should not be in this situation. Shoulda, coulda, woulda right? The owner purchased this property in 2000 for $494,045 using $458,150 worth of financing in two loans. So far, so good.

But she refinanced in 2003 into a $640,000 loan. Between May 2004 and July 2005, $230,000 more worth of credit/loans were added to the property - one or both may be HELOCs and we don't know for sure if they were fully tapped.

But, it seems likely the money was pulled out since another loan for $200,000 - we think a standalone second - appeared in April 2006. Assuming all the cash was used, the total amount of loans added to the home over the course of just two and a half years could be as high as $1,070,000.

To give you an idea of the significance of tapping the house for money: If the owner never refinanced or pulled any additional money out, and they could sell the home for $849,000, they would earn a profit of about $300,000, including 6% sales costs.

Instead, the owner is underwater and had to lobby the lender(s?) for a short sale, which we know from the listing has been approved.

The $640,000 loan also is now delinquent, and a notice of default for $26,394 was filed against the property in May. Too bad the home did "not stay on the market long" as the listing proclaimed.