Appreciating the Hot Market
It isn’t that residents of Balboa Peninsula don’t care about Orange County’s soaring housing prices, or that their sliver of a neighborhood--some 4 1/2 miles long and no more than 450 yards wide--can yet again boast of having the highest prices of all.
It’s just that in exclusive areas like this, where the median home price recently topped $1 million for the 19th time in 11 years, homeowners tend to refrain from getting too excited about the numbers. They’ve come to expect the real estate highs and, some say bitterly, the lows that often follow.
“That’s great,” said Roger Miner, 50, when told of the latest home sale figures near his two-story, ivy-covered house on Miramar.
“I didn’t know they were up that much again. I hope it holds. But seven years ago I [would have] lost 40% of the value of my home. So I just don’t get all worked up about a spike here and there,” he said.
But while many on the Peninsula seem blase, mid-level homeowners and real estate agents alike are absolutely giddy about the $40,000 spike recorded last month over the county’s median home price a year earlier. The new high of $284,000 marked the seventh record-breaking price in the past 10 months.
“I’m shocked at this market,” said Patrick Knapp, an agent at Remax Real Estate in Newport Beach. “Forget the luxury homes; it’s shocking to me to see what’s basically a three-bedroom condo in Aliso Viejo selling for $300,000. It’s incredible.”
Such sustained home sale gains tend to bolster the belief that the emerging economic slowdown nationally has yet to enter Orange County’s landscape.
Sales of high-end homes have historically reflected the stability of the overall market, analysts said, and the latest figures could indicate continued price increases for at least three more years.
“What this tells us is, the people making money in Orange County feel very good about the money they’re making,” said John Karevoll, a DataQuick Information Systems analyst who prepared the latest home sales report.
“These are people who don’t have to buy homes. They’re making discretionary purchases, maybe because they want another garage or an additional bedroom, but not necessarily because they have to have it,” he said. “You can put off this kind of purchase if you don’t feel very comfortable about your financial future.”
To be sure, October’s median price--the midpoint of all sale prices--was based on sales of only five Peninsula homes, and has ricocheted over the past decade on a monthly basis from below $200,000 to more than $2 million. And the luxury market in Orange County, which plummeted during the recession in the 1990s, has bounced back, pulling the overall market higher and making Orange County the most expensive housing market in the Southland.
Even so, many homes on Balboa Peninsula are being snapped up within days, which real estate agents attribute to fewer homes for sale and higher demand. As prices are surging, buyers are finding 20% fewer home listings to consider this fall from a year earlier, said Bob Berg, an agent at Coast Newport Properties who specializes in the Balboa area. He estimated that out of 1,800 Peninsula homes, only about a dozen are currently listed for sale.
But homeowners in other areas, particularly in the mid-level neighborhoods, have responded swiftly to the high-priced sales around them, and many have put agents on notice that they plan to list their own homes soon. When a four-bedroom house on Wakeham Park in Costa Mesa sold last week for $483,000 after less than six days on the market, neighbors took immediate notice.
“I couldn’t believe it went for that,” said Don Wexler, who lives several houses down. While his home doesn’t front on the park, Wexler said he’s already called a real estate agent to see how much he might get for it.
“My wife,” he said, “is already playing interior decorator for the next place.”
Still, such demand has done little to inspire many high-end homeowners, especially on the Peninsula where neighbors live in close quarters on squat lots among a range of home styles--from the lavish waterfront mini-castle that sold last month for $3.1 million to the quaint bougainvillea-trimmed cottage that, with all of its 856 square feet, went for $1.1 million. Only 18 months earlier, the same quaint two-bedroom, one-bath house sold for $890,000.
Last Friday, a group of agents toured an oceanfront property that had just been listed and promptly began calling clients to report their find. The home, listed for $2.2 million, was among the smallest on the waterfront.
But the four-bedroom, three-bath home had a living room that opened to a patio that spilled onto the beach. And by Saturday, hours before the firm’s potential buyers returned phone calls, the home was in escrow.
By contrast, luxury homes miles away from the ocean in north Orange County are so scarce that shoppers in places such as Yorba Linda, Villa Park and Anaheim Hills are settling for properties priced well below what they can afford, according to a study released Tuesday by the Concord Group a real estate consulting firm.
“It’s extremely thin, as thin as I’ve ever seen it,” said Michael Dreyfus, an agent who specializes in luxury homes for Prudential California Realty in Newport Beach.
Margaret Trombley said she pays little attention to the sprinkling of “sold” signs that go up around her 50-year-old house in the thickest stretch of the Peninsula, mostly because she has no intention of moving. She heard that last month a fair-sized house around the corner sold for $750,000--on a street that “isn’t even a street at all, just a sidewalk down the middle separating the homes.”
“It’s silly, is what I think,” said Trombley, 64, who bought her own home 25 years ago for “pennies.”
“I mean, they can’t even park their cars on that street. They can’t park in front of their houses and they’re paying that kind of money,” she said. “I think I’d go buy me some land instead.”
*
Times staff writer Daryl Strickland contributed to this report.
