Today’s Microscope on the Market focuses on the Laguna Niguel real estate market.

Homes Under $500,000

In the under $500,000 market, Laguna Niguel does not vary from any of the cities I focused  on in South Orange County with a whopping 63.9% of the active properties in a short sale situation.  Couple of things to note – it would appear that there is significant movement with 71 properties in escrow.  Sadly, 38 of them are short sales and those can sit in escrow for 60 to 180 days and that can skew the perception of significant movement.  Notice only 18 have actually closed escrow in the last 30 days.

I want to also point out the very low number of bank owned inventory.  Pay close attention to this number in the coming months.  It will increase again based on the end of the moratorium on Notice of Defaults.  Filings are back up to levels prior to the moratorium so watch for this number to increase.

Also of note, despite the large supply of short sales, buyers still look to bank owned homes and equity sellers for their purchases by a significant degree in relation to the supply.

Homes $500,001 to $750,000

Again, despite the large number of short sales, buyers love bank owned inventory and it doesn’t last on the market and their is still a significant demand for reasonable equity sellers.

Homes Over $750,001

As I noted in Coto last week, there is just very little in the upper price points that is moving.  At this rate of consumption (12 homes a month), we have a 12.25 month supply of homes.  If nothing else were to list in this price range, it would take us over a year to consume the existing inventory with current buyer demand.

The good news in Laguna Niguel – there is very little bank owned inventory and very few short sale listings.  That can be good news for values in the coming year.  I’m not suggesting any appreciation guys – but even with slow sales, these folks may have the financial strength to hang on.

I would like to invite you to take this quick (2 minutes or less) survey about your thoughts on the Orange County housing market. It is entirely anonymous and I will post the results in one week.

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Today’s Microscope on the Market focuses on Coto de Caza.

If you aren’t from Orange County – yes this is the home of the infamous Real Housewives of Orange County, although I can’t say that the friends that I have living in Coto are anything like the woman as depicted on that show.  It’s really a beautiful gated community with homes in a wide variety of prices ranges.  But I won’t kid you – some of the highest priced homes in Orange County are behind these gates.

I toyed with varying the breakdown that I usually do (Under $500k, $500 to $750, and over $750), but I’ve decided for a number of reasons to leave them.  More later….

Homes Under $500,000

Although clearly, there is not a lot in Coto in the under $500 market, the buying behavior is similar to other parts of the county – all 5 that are in escrow and the 1 closed sale are all either bank owned properties or short sales.

Homes $500,001 to $750,000

This was one of the rare instances where current equity sellers in escrow actually exceeded the active listings that were equity sellers. I’m not ready to ready too much into it – we are only talking about 6 sellers.

Homes Over $750,001

Given the wide range of values in the upper end of the market in Coto, I think it’s important to take note of just a few things in the over $750,000 segment:

• The highest priced home currently in escrow is $1,099,000.
• The highest sale in the last 30 days is $1.6 million.
• The highest sale in the last 6 months per SocalMLS was $2.9 million.
• The only sale over $2.9 in the last 12 months was the record sale on Violeta for $19.5 million.  There have been no sales other sales over $2.9.
• In the preceding 12 months there were 7 sales over $2.9 million ranging from $3.2 million to as high as $6,643,750.  (Where did that buyer profile go?)
• Currently, there are 24 homes over $2.9 in Coto de Caza – 16% of the active inventory.

While the residents of Coto de Caza may be used to having a longer time on the market given the price point, there is no question that they are certainly feeling the shift in the market at the higher end as well.  We have seen the high end somewhat insulated until recently, but when you seen see such a significant drop in purchases at the highest end, you know that no one (not even the ‘Real OC Housewives’) is protected.

While many of us have a loose understanding of how the housing and financial markets contributed to our current recession, many of us are unaware of the ways that the accounting method – Mark to Market – contributed to the magnitude of the crisis.

I’ve heard the term ‘Mark to Market’ before, but my understanding was loose at best.  It was a blog post written by Pasadena’s local expert, Irina Netchaev, that really broke it down in a way that was simple enough for me to get my head around.  Understanding this one facet of the crisis is really eye opening and definitely worth taking 5 minutes to read.

Today the microscope is on Mission Viejo.

So many of the media numbers focus on Orange County performance, but real estate performance can vary dramatically within our large county and particularly at various price points.

I’m going to spend the next several posts breaking down each of the South Orange County cities to give you an idea of local performance.  Whether you are buying, selling, or just keeping an eye on your local market, these numbers tell the story.

BTW Dear Friends/Readers, if you find this number crunching downright boring – stay tuned.  I always come back to the conversations that are much more fun than this! 

Homes Under $500,000

I think one of the revealing things about the under $500,000 market is the fact that while nearly 68% of the active inventory are short sales, they make up less than 28% of the homes that closed in the last 30 days. Demand also is high for bank owned product but very little currently exists – only 6.2% in this price range.

Homes $500,000 to $750,000

Again, very little inventory in the bank owned market, but significant demand.  There were very few sales in $500,000 to $750,000 market, as well as the $750,000 market as shown below.

It’s important to note where the demand is: of the closed sales in the last 30 days 81.1% have been in the under $500,000 market.

Homes Over $750,001

Interestingly, there are significantly less short sales in this price point. The bad news – sales are slow and with current buying trends, it would take 12.25 months to exhaust the current inventory of homes if nothing else were to come on the market.

However in the under $500,000 market, it would only take 4.12 months to exhaust all the inventory at the current rate of consumption. As I have mentioned many times here, the short sale listings takes months to close and skew the numbers dramatically. With current inventory, it would only take 1.9 months to consume the equity seller and bank owned listings under $500,000.  This sector of the market is no longer a buyers market.