Category : Laguna Beach Real Estate
Ted Wells talk.
Ted Wells talk.
A Peoria, Ill tractor foreman becomes a U.S. fascination in Laguna Beach
‘OK, who took my car?’ said a more than tipsy Marine Captain Joe Geston.
Joe was finishing up his Friday night’s/early Saturday morning’s ‘end of the week fun time’ at the Marine pilot’s favorite hangout, the Sandpiper, aka The Dirty Bird.
During the 50’s and early 60’s the club was the ‘Mecca’ for the local Marines wanting to blow off steam. As a matter of fact, to this day the Sand Piper still has the Marine badges from those troops displayed on their wall (see photo).
Well on this particular night, Joe went out to find his car to no avail. Perplexed and inebriated he stumbled back into the bar and confronted his comrades who all denied taking it.
He then asked ‘then who did’?’
Well they went on to the White House a well know eatry in Laguna to sop up the alchol and Joe decided to call a fellow Marine in Washington D.C. and jokingly asked him to look for his car around the White house. The guy thinking it was the D.C. White House actually looked for him. The guys got a kick out of this a said lets call some random common name in a common US town and tell the guy again they lost the car and would he look at a street that every town has, ‘5th and 6th St.’?
The came up with Melvin Miller in Peoria, Ill and called the operator who said ‘yes’ there is such a person.
Now while its 1 am in the morning in Laguna its 4am in the morning in Peoria and Marvin picks up the phone from a dead sleep and says ‘Hello’.
Captain Geston, in a very liquid voice, says ‘Have you seen my car?, I lost it at 4th and 5th St.’
Melvin, who’s a ‘salt of the earth mellow’ guy and a salesman with Caterpillar tractor, goes along with it and he learns that Joe is in some place called Laguna Beach and that Joe lost his car and he thinks Melvin took it and he should bring it back.
The other Marines listening in were going nuts and Melvin patiently explains they are 2,000 miles apart and it would have been quite difficult for him to drive back his car even if he did have it.
Well the Marine comes back the following day and sees his car in the exact place he left it. He also comes across Melvin’s number and after a few ‘eye openers’ he gives him a call again and they continue this non seneschal conversation.
In fact, the word gets out about Melvin and other marines start calling him as well and they even sent him Christmas cards from the different cities the pilots went to around the world. It would be nothing for someone at a party to call Melvin to pick up some ice.
Again Melvin in his Midwestern dry humor goes along with it and the word about him spreads throughout the Corp.
One Marine even visited him at his house and got his picture which was promptly displayed behind the Sandpiper bar.
This inspired one Marine to say ‘let’s bring Melvin out’.
They put a howitzer shell on the bar and the pilots start throwing their change in it. Next they make tee shirts and hats and the word gets out in Laguna about the loveable Melvin. In a matter of a week they’ve come up with $300 and they invited Melvin and his wife out, though she declines for ‘The Melvin Miller Week’.
So the next thing you know the word on Melvin gets out throughout Southern California and the U.S. and everyone wants to participate.
The Marines charter a bus to pick him up at the Los Angeles airport, he has lunch with Jayne Mansfield, he goes on the Tonight show, and he’s in the papers nationwide as well as Time magazine.
Finally when he gets to Laguna Beach they hold a ‘Melvin Miller parade’ where he went down the Coast Hwy in the back of a convertible Cadillac which is preceded by a miniature tractor that his employer, Caterpillar, sent.
After a couple nights of ceremonies at the Sandpiper and sunning himself in his own personalized chair and umbrella he’s whisked off again for more adventures.
The Del Mar horse track holds a ‘Melvin Miller Sweepstakes’ and in Mexico they name a bull after him for one of the fights.
But to top things off the whole Marine base gathers for a farewell ‘fully dressed’ inspection for him.
And finally as their escorting back to the airport after a whirl wind week of adventure they ask him what he thinks and he calmly responds ‘I got to get back, I got work tomorrow’.
Long live Melvin.
This was a great event with about 50 people attending a great meal in a beautiful restaurant, Taverna, originally the Laguna Federal Savings and Loan. Good food, great people, great surrounding, a few libations and a great talk by Ted Wells, a published architectural historian. We hope you can join us at the next event.
Marking its first foray into Orange County, Zephyr – a San Diego-based real estate development company – has broken ground today on South Cove, a condominium community featuring 168 luxury residences at Del Obispo and Pacific Coast Highway in the heart of Dana Point, directly across the street from Doheny State Beach.
The company acquired the choice nine-acre land parcel for $50 million in July of 2015. Completion of the community is slated for 2019. Pre-sales begin in early spring 2017, and the models are slated to open in late summer 2017.
According to Zephyr Chief Operating Officer Chris Beucler, the community will feature three models: “Aliso” flats, “Trestles” townhomes and “Strands” twin homes – each ranging from one to three bedrooms with 883 to 2,341 square feet. Ten residences will feature live/work space, with commercial opportunities fronting Pacific Coast Highway. Seventeen homes will be offered as affordable housing. All homes will have attached garages and top notch interior finishes and accents, with select residences featuring indoor/outdoor floor plans, balconies, porches, rooftop decks, idea spaces and options for beach rinses, dens and more.
“South Cove is the first project of its kind to be built in Dana Point in more than 25 years,” said Beucler. “We’re thrilled to announce the groundbreaking of this luxurious, barefoot community that will offer residents immediate access to Doheny State Beach and Dana Point Harbor’s restaurants and shops via a short stroll on the San Juan Creek Bike Trail, or the Pacific Coast Highway Pedestrian Bridge.”
In addition to the area’s abundant natural beauty, South Cove residents will enjoy a multitude of amenities, including a resort-style swimming pool with cabanas and common areas throughout the community, and outdoor enthusiasts will have access to miles of walking/bike paths, plus ocean sports like surfing, paddle boarding, fishing and more.
Founded in 2008, Zephyr is a San Diego-based real estate development and investment company committed to building high-quality attached and detached homes, condominiums and luxury apartments. The company, co-founded by Brad Termini and Dane Chapin, has successfully completed and sold developments throughout San Diego County. Currently, Zephyr manages projects in Coronado, San Diego, La Jolla, Del Mar, Solana Beach, Rancho Santa Fe, Encinitas, Carlsbad, Escondido, Mira Mesa and Dana Point. Over the last eight years, the team has completed more than $750 million worth of residential developments.
From “The First 100 Years in Laguna Beach 1876-1976″ by Merle and Mabel Ramsey
The Postman Always RIngs Twice, 1946 version, was partially filmed in Laguna Beach. Director Tay Garnett wanted to shoot in as many actual locations as possible for the movie, a rarity for MGM at the time. For the seaside love scenes, he took the cast and crew to Laguna Beach, where a fog made shooting impossible for days. After a few days, they moved to San Clemente in search of clearer skies, only to have fog roll in there as well. Then word got to them that the fog had lifted at Laguna Beach. By the time they got back there, however, it had returned.
The strain of waiting for the fog to lift caused the director, who had suffered from drinking problems in the past, to fall off the wagon. Garnett holed himself up in his hotel room, where nobody could get him to stop drinking. Concerned about rumors that he was going to be replaced, Garfield and Turner decided to visit him on their own. Garfield could get nowhere with him, but Turner managed to convince him to go back to Los Angeles for treatment. When he returned a week later, the fog lifted, and they all went back to work.
Another result of the location delays was a brief affair between Garfield and Turner, according to Garfield’s friend, Warner Bros. director Vincent Sherman. He said Turner was the only co-star with whom Garfield ever became romantically involved. There had been sparks between the two since the first day of shooting, and the delays had sparked a close friendship. Finally, they shared a moonlit tryst on the beach but that was their only night together. The two realized that whatever was happening on-screen, off-screen they had no sexual chemistry together. They remained friends nonetheless.
*TCM Frank Miller
Lana Turner and John Garfield with unknown soldier, in Laguna. Photo possibly by Ed Hobart (LB lifeguard, Police Officer, Journalist) and father to Carolyn Hobert Fisch.
First, let’s take a look back at what happened in 2016 in terms of the inventory, demand, expected market time, luxury properties, and distressed properties.
Active Inventory: Strong demand and the trend in homeowners not moving kept the inventory at very low levels all year.
The year started with an active inventory of 4,400 homes on the market and ended with a little over 4,200. A total of 44,000 homes came on the market in 2016, identical to 2015. That may seem like a lot; however, it’s 31% fewer than the number of homes that came on the market annually prior to the Great Recession. A major housing trend that started in 2008 in the midst of the recession was fewer homeowners opting to sell their homes. The 44,000 homes pales in comparison to 2005 when 64,000 homes were placed on the market. It’s no wonder buyers were tripping over themselves to find a home to purchase in 2016.
Cutting into the inventory a bit was closed sales. In 2016, there were 650 more closed sales, 2% more than 2015.
Other than starting the year off with fewer homes on the market, 2016 looked a lot like 2015 in terms of the inventory. The peak of 7,329 homes was reached in mid-July due to slightly stronger demand during the summer than what is typical. The Orange County yearly peaks tend to occur during August. The 2016 peak was still slightly higher than last year’s peak of 7,167.
Nonetheless, the active inventory has remained at anemically low levels since the start of 2012, and has been a seller’s market ever since. The long term active listing inventory average is 8,000 homes, and it has only reached that level for a few weeks in the summer of 2014.
In order for the market to start tilting in the buyer’s favor, the active inventory not only has to eclipse the 8,000 home mark; it needs to remain consistently above that threshold for a long period of time. Only when there is extra supply will appreciation slow. Until then, we can expect more of the same, slow methodical appreciation.
Homes are not appreciating as swiftly as they did in both 2012 and 2013. With low interest rates and very hot demand, the only reason the inventory grew at all this year was on the backs of overpriced sellers. Buyers were willing to stretch a tad in the hotter ranges, below $750,000 for detached homes and below $500,000 for condominiums. However, sellers who juiced their price to leave negotiating room, or were afraid to leave money on the table, or simply wanted to see if they could get more, learned a hard lesson in pricing and success. Success only comes by meticulously pricing a home according to its true Fair Market Value. Price above that value and homes sat on the market with no offers until the price was properly adjusted.
The inventory grew by 60% from January through July. And, as Orange County housing transitioned from the Summer Market to the Autumn and Holiday Markets, the inventory dropped by 42%. In the past two weeks alone, the inventory has shed 12%, 555 homes, and now totals 4,234, the lowest level since June 2013. Over the past twelve years, only 2013 had fewer homes to start a New Year with 3,161. Home price appreciation has everything to do with supply and demand. With such a low supply, 2017 is definitely starting on the right foot.
Demand: With record low interest rates in the mid 3’s, demand continued to sizzle in Orange County.
This year demand had a bit of a slower start due to a speed bump in the Chinese economy, a worldwide stock market correction, and a detrimental drop in the price of oil. This was accompanied by a flight to the safety of long term government bonds, especially United States treasuries. The rush to bonds helped fuel this year’s boom by ushering in mortgage rates in the mid 3’s. Despite higher prices in Orange County, the low interest rates helped improve home affordability and buyers took advantage.
For the first couple of months, demand was off by 5% compared to 2015, but by mid-March, the slower start was in the rearview mirror. Oil, China, and international stock markets were on stronger footing as well. The Orange County housing engine, along with the rest of the country, was vibrant and making up for lost time. The second half of the year experienced 10% stronger demand with interest rates remaining at historically low levels.
It was not until after the election that interest rates rose to the mid 4’s, too late to have any kind of an effect on the housing market. It came at a time where the inventory was already seasonally dropping. It won’t be until after the first couple of months of 2017 that the market will digest the higher rates.
With rates in the 3’s for most of 2016, it was no wonder buyers were lining up to purchase. For proper perspective, in 1990 the interest rate was at 10%. In 2000, it was 8%. And, just prior to the Great Recession, interest rates were at 6.4%. Higher rates cut into Orange County affordability dramatically due to its higher prices. For now, even at 4.5%, interest rates are facilitating affordability and propping up demand.
Within the past two weeks, demand dropped by 287 pending sales, or 14%, and now sits at 1,697. Last year at this time, demand was at 1,629, or 4% fewer than today.
Luxury End: More homes sold in the luxury end this year than ever before.
Orange County’s luxury home market has been pumping on all cylinders. Through December 29th, more homes have closed above $1.25 million (the threshold where the top 10% of all closed sales occur) than ever before in the county. There were 3,229 closed luxury sales compared to 2,941 last year, up 10%. The highest level prior to the recession occurred in 2005 at 2,857.
So, demand was up for luxury homes. Yet, for many sellers in this higher tier, the market felt sluggish. Higher priced homes notoriously behave differently compared to the lower end of the market. The upper end always tends to contradict the hot housing market. Homes don’t fly off the market with multiple offers and the expected market time ranges from 5 months to even over a year depending upon the price. There are fewer potential buyers in the highest stratospheres of the market.
Overall, the market felt a bit slower because there were more homes on the market competing for a small pool of buyers. The higher demand helped, but there were a lot more luxury homes for sale. At the end of June, there were 21% more higher end homes compared to the prior year. The disparity is not as great today, but there are still 12% more on the market today compared to the end of 2015.
Distressed Properties: Foreclosures and short sales are nothing more than an asterisk to the 2016 market.
In Orange County, homes have appreciated substantially since the beginning of 2012. With a five year run in housing, the number of underwater homes have declined to 1.6% of all homes with a mortgage. During the Great Recession, the number climbed to as high as 25%. In 2016, distressed sales were nothing more than an asterisk to an overall healthy, nearly recovered housing market, almost not worth mentioning in reviewing 2016.
Back in 2012, distressed homes accounted for 36% of closed sales. In 2016, with over 31,000 closed sales, there were only 390 foreclosures, or 1.2%. And, there were only 498 closed short sales, or 1.6%. That means that 97.2% of all closed sales were good ol’ fashioned homeowners with equity.
The distressed inventory started the year at 176 total foreclosures and short sales, and ended the year at 117, a difference of 59, or 33% fewer.
Expected Market Time: Based upon the low inventory and hot demand, it was a seller’s market the entire year.
The expected market time (the length of time it would take to place a home into escrow based upon current supply and demand) remained below the 90-day mark all year, continuously tipping in the seller’s favor. It only dipped below 60 days, a HOT seller’s market where homes appreciate at a faster clip, in March and April. For the most part, this year’s market remained between 60 and 90 days, a slight seller’s market where homes don’t appreciate that fast, but the seller’s still get to control more of the terms of a sale during the negotiating process.
The expected market time for all of Orange County grew to 75 days in the past two weeks, but is still a great start to a New Year. As a matter of fact, in the past 12 years, 2017 will have the second best start. The best start to a year occurred in 2013 with an expected market time of 47 days.
For homes priced below $1 million, the expected market time is at 53 days. For homes over $1 million, the expected market time rises to 196 days, or 6.5 months.
Orange County has not experienced equilibrium, a market that does not favor a buyer or seller, between 3 and 4 months, since the second half of 2014. It has not been a buyer’s market, above the 4-month mark, since the start of 2011.
The 2017 Forecast: With higher interest rates, change is in the air.
With interest rates increasing by nearly a full percent since the election, change is afoot. The new presidential administration is poised to spend money on the U.S. infrastructure and lower taxes, a recipe for increased inflation. As a result, many experts are anticipating more Federal Reserve hikes in the short term rate, which will be accompanied by a rise in long term rates as well. They made an initial hike in December and are poised to make a few more in 2017. Long term rates are not immediately impacted by changes in the short term rate, but multiple increases will definitely have an impact on the Orange County housing market. Here’s the forecast:
The bottom line, 2017 will feel a little slower than the past couple of years. At first buyers will be lining up to take advantage of the end to low rates, but as affordability erodes, so will the buyer’s appetite to pay much more than the Fair Market Value for a home. The inventory will rise on the backs of sellers pushing the limits on price. The market will move from a hot seller’s market for the first half of the year, to a market all about price. As the inventory rises, appreciation will come to a halt and Orange County will be poised to move from a seller’s market to an equilibrium market, one that does not favor a buyer or seller.
Happy New Year!