Category Archives: Laguna Beach Real Estate

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What your cold feet to buy could be costing you?

Almost every one of my clients says at one time or another – ‘I really blew it not buying that house years ago’.  The reason they didn’t buy was they thought the market or house couldn’t go up any higher and there has to be a correction.

I remember when I first moved to Laguna in the 70s and people were saying I can’t believe that place sold for $200k, a perceived ridicules high price. Probably worth a couple million now.

But everything increases in price (even after a correction) and a new ‘price bar’ is set. You name it – stocks, cars, gas, tickets to ball games, meals at restaurants and much, much more – they all go lower during tough economic periods and then they bounce back with a vengeance, way past the level they were during the good times before.

And a new ‘normal’ price level is set and people get used to it and move forward. Hopefully, there’s a new ‘normal’ in pay as well.

The following is an example of what it could cost you in a year’s time if you waited another year to buy with rates going up:

Today vs Buying in the future

Uploadedby Sean McCracken of Laguna Beach california

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It remains a strong seller’s real estate market in Orange County, with many properties selling quickly and at full price, but there’s an undercurrent of concern that we are the near the peak of pricing.  That has some buyers nervous even with the local economy is strong.  For those who are a little nervous, sometimes it turns into cold feet – and it’s costing them.

Oh yes there will be a correction sometime in the future but real estate economist say that it won’t be anything like the last one since mortgages are being written at a much higher standard.

Lastly, in an appreciating market, as we have right now, it should be noted that often the next house or townhouse or condo will be more costly or in worse shape than the one you could not decide to get serious about.  Stay nervous too long, and you could ultimately really impact how much home you can buy at all.  Worse yet, take too long and you may price yourself out of the market entirely.


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What does it mean to be “priced out of the market”?

In a nutshell, it means that while a few months before, you could afford the type of house you wanted (more or less), but prices have risen so fast that now you feel that you cannot buy anything at all. You feel that it’s no longer worth it to buy – so you continue to rent. And you continue to watch prices rise, both for the home you wish you had bought but also the rents over which you have no control. The gap between what you could have bought (but didn’t) and what you can buy now can mean the difference between feeling able to buy a home and not.  When the gap gets too big, you are “priced out of the market”.

Have you been patiently waiting for just the right house to come on the market?  It may not be forthcoming.  It is very possible that while you watched the market last year, prices were getting primed for a rebound of sorts. It’s now underway and guess what?  What you could afford a year ago is no longer possible today!

This is one time when waiting does not pay off!

Why do buyers wait when they might do better to jump in?

they may be unrealistic as to what the market will bear (sometimes despite the statistics)they are cautious to the point of being unable to move forward they are listening to bad advice (at work, from friends etc.)

This is no time to fiddle and watch Rome burn. If you want to buy a house in Orange County and have been sitting on the fence, this may be the time to get off and dive in.

While I’m not a ‘pushy’ agent but an informational one this argument is an important one to pass on.


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What may your cold feet costing you?

Almost every one of my clients says at one time or another – ‘I really blew it not buying that house years ago’.  The reason they didn’t buy was they thought the market or house couldn’t go up any higher and there has to be a correction.

I remember when I first moved to Laguna in the 70s and people were saying I can’t believe that place sold for $200k, a perceived ridicules high price. Probably worth a couple million now.

But you know everything increases in price (even after a correction) and a new ‘price bar’ is set. You name it – stocks, cars, tickets to ball games, meals at restaurants – they all go lower during tough economic periods and then they bounce back with a vengeance,way past the level they were during the good times before.

And a new ‘normal’ price level is set and people get used to it and move forward. Hopefully, there’s a new ‘normal’ in pay as well.

The following is an example of what it could cost you in a year’s time if you waited another year to buy with rates going up:

Purchasing Power uploaded by Sean McCracken

It remains a strong seller’s real estate market in Orange County, with many properties selling quickly and at full price, but there’s an undercurrent of concern that we are the near the peak of pricing.  That has some buyers nervous even with the local economy is strong.  For those who are a little nervous, sometimes it turns into cold feet – and it’s costing them.

Oh yes there will be a correction some time in the future but real estate economist say that it won’t be anything like the last one since mortgages are being written at a much higher standard.

Lastly, in an appreciating market, as we have right now, it should be noted that often the next house or townhouse or condo will be more costly or in worse shape than the one you could not decide to get serious about.  Stay nervous too long, and you could ultimately really impact how much home you can buy at all.  Worse yet, take too long and you may price yourself out of the market entirely.


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Interesting OC market information on the turnover rate of homes per city

Check out Laguna Beach turnover rate – With 4% turnover in 2015 (410 homes sold out of 9,300 homes in Laguna) It’s is taking 23 years to sell all the homes in Laguna

Gone are the days of homeowners moving every 7 years.

So, why aren’t homeowners moving like they did a decade ago? There are a number of factors that illustrate why they are staying put. The homeownership rate for 18 to 34 year olds has been dropping since reaching a height in 2005, and about a third of all millennials live with their parents. Ultimately, that delays would-be empty nesters from downsizing. Also, there aren’t as many new homes being built in Orange County, especially below the $1-million mark. This used to create a lot more real estate activity as many locals bought new, but had to sell their existing homes first. With the county running out of vacant land, this will be an ongoing issue.

Another factor that helps explain why homeowners are not moving as often as they used to is that owning a home long term and paying off the mortgage is now in vogue. The severity of the Great Recession rattled our collective psyche and people now look at home ownership a bit differently. As is typical in the Midwest, people want to hang onto their homes and dig in their roots.

One of the biggest factors, that is talked about in the real estate trenches on a daily basis, is that homeowners are afraid to sell their home only to turn around and find nothing available to buy. Essentially, the low inventory is preventing would be sellers from coming on the market, which only exasperates the problem. Yet, there are ways around this dilemma. A double move is a solution, where a homeowner sells their home, moves into a monthly rental, and then takes their time to isolate the most ideal home for their family. Moving companies work with the double move scenario often and can crate and store whatever will not be used at the short term rental. Another solution is for a seller to accept an offer to purchase with the condition that they are able to find a replacement property within a specific time period, 30-days being most common. If they are unable to find a replacement home within the given time period, then the contract is cancelled or additional time may be negotiated.

The current trend of an underwhelming annual inventory and a low housing turnover rate is not going to change anytime soon. With that knowledge, buyers and move-up (or move-down) sellers need to approach the market with realistic expectations and plan accordingly, utilizing the expertise of a professional REALTOR®.

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Tick, Tick, Tick the Spring market is coming upon us

Just when the January ‘going into escrow’ numbers for Laguna showed a potential slowdown in demand it bounces back with a 50% increase in February.

  • Homes going into escrow (a true sign of what is happening today sales wise) jumped from 30 homes to 47 homes by March 1. This is below other year levels but not by much.
  • Inventory has climbed from 162 homes for sale in January to 195 homes as of the end of February an increase on 30 homes and accelerating.  This is still low compared to past years but not by much.
  • Go figure. There were only 17 homes sold in Feb. a 6 year monthly low after 29 homes sold in Jan. a 6 year high.
  • Looking at this data it looks like most of the sales activity is below $2.5M

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See the rest of the charts and graphs


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