San Diego's million-dollar home sales up in 2010

It marks the first annual increase since in 5 years, data show

BY LILY LEUNG

THURSDAY, FEBRUARY 17, 2011 AT 8:43 A.M.

Sales of million-dollar homes in San Diego County rose 15 percent in 2010, the first year-over-year increase since 2005, according to DataQuick Information Systems.

Last year, the county saw 1,814 sales in that price range, up from 1,578 in 2009, a possible sign the high-end market may be picking up, real estate experts say.

That upward motion is mirrored statewide, where 22,529 homes priced at $1 million or more sold in 2010, up 21 percent from 2009, when 18,621 sold.

In San Diego County, the priciest sale in 2010 was a 4-bedroom, 4.5-bath beachfront home in Coronado, at $10.5 million, according to county assessor’s records and agents. The home has a rooftop terrace overlooking the ocean andHotel del Coronado, a theater room and saltwater spas.

Though sales of high-end homes rose last year in the county, they’re still 68 percent lower than the peak of 5,671 sold in 2005, DataQuick numbers show. The trough was 1,521 in 2002.

DataQuick analyst Andrew LePage said more activity in the million-dollar-plus market could be “another indication that the economy is improving.”

Patricia Lou Martin, an agent at Kramer & Martin Real Estate, said in many cases last year’s sellers of high-end properties resorted to cutting prices to draw more interest. Many times it worked.

As for the county’s top sale in Coronado, which was on the market for 158 days, the original asking price was $14.8 million before it was sold for $10.5 million.

“Oftentimes, when you have a beautiful home, it’s hard to devalue it,” said Martin, who specializes in coastal communities and Rancho Santa Fe with business partner Patricia Kramer. “When you’ve been on the market for 150 days or for a year, it’s an OK time to reduce prices ... to start getting activity.”

Martin said 2009 was a “very difficult time” for agents with more-expensive homes, but the situation improved in late 2010, when buyers made their moves because they believed prices had reached their bottom.

Lily Leung: (619)293-1719; lily.leung@uniontrib.com; Twitter @LilyShumLeung

Home affordability in S.D. County at record high

BY LILY LEUNG

FRIDAY, FEBRUARY 11, 2011 AT 4:44 P.M.

Home affordability for first-time buyers in the San Diego region reached a record-high last quarter, made possible by historically low lending rates and slight drops in median home price, according to an index from the California Association of Realtors late this week.

Sixty-two percent of first-timers in the region can afford starter homes, rising from 60 percent in the third quarter and 57 percent one year ago, the quarterly barometer shows. Last quarter’s figure was also the highest level of home affordability in the county in data going back to 2000.

By comparison, just 23 percent could afford that starter home in the second quarter of 2006, the all-time low for housing affordability in San Diego County.

“The reason for the new record has to do with the fact that home prices are considerably lower than those at the peak though they’ve edged up and hit bottom,” said Robert Kleinhenz, the association’s deputy chief economist. “Mortgage rateshave hit historic lows, the lowest in decades.”

After the California Association Realtors released its index on Thursday, Freddie Mac officials reported the average 30-year fixed rate jumped to 5.05 percent this week from 4.81 percent last week, the highest it’s been since May. (See the U-T's coverage.)

While the increase will have a negative impact on affordability, “that’s a marginal increase,” said Kleinhenz, who predicts that lending rates will continue to climb steadily in 2011.

“Even a one-point increase will be near historic lows, in terms of mortgage rates,” he added.

Using the Realtors’ math, a first-timer last quarter had to earn an annual income of $50,100 to purchase a starter-home priced at $324,190. The monthly payment was $1,670, including taxes and insurance, and assuming a 10 percent down payment, and an adjustable interest rateof 3.39 percent.

That’s down from an adjustable interest rate of 5.76 percent in the spring of 2006, when an entry-level home was $521,118 and a first-time homebuyer had to earn $100,152 a year.

The index measures the percentage of local households able to afford a starter home — valued at 85 percent of the area’s median house price. The index assumes that buyers are making a 10 percent down payment and getting an adjustable-rate loan. The association considers its measure “the most-fundamental measure of housing well-being for first-time buyers.”

Last quarter’s income figures are down from the third quarter, when a San Diegan had to earn $52,200 for a starter-home priced at $329,470. The adjustable rate at that point was 3.66 percent.

Michael Lea, director of San Diego State University’s real estate center, takes issue with using adjustable rates in the index because most first-time homebuyers qualify for FHA loans. And for most, those loans are fixed rates, which tend to be more expensive.

Still, Lea agrees with the group’s general conclusions on home affordability for the county.

“It’s still a good time to buy from an affordability perspective,” Lea said.

Social Media Statistics & Facts 2010

Holding pattern seen in local home prices

February 3rd, 2011, 11:46 am by Jon Lansner

A quarterly forecast update from economists Anil Puri and Mira Farka at Cal State Fullerton’s Mihaylo College of Business and Economics had this to say about real estate …

Local outlook: “Conditions in the housing market are improving in Southern California even though the latest data has not revealed the full extent of the improvement. Foreclosures continue to hobble the market and will remain a major source of concern given issues in foreclosure proceedings. Sales activity is supported by low mortgage rates (though these are slightly up from rock – bottom levels), and this trend is expected to continue into the current year.Housing prices, however, are in a holding pattern and will continue in that range well into 2012.”

National outlook: “Housing. The housing market continues to remain a troubled spot and is expected to restrain the speed of the recovery in 2011. Housing imbalances persist, home prices have shown further weakness, mortgage credit is tight, and housing activity remains low. Although an outright free – fall seems to be well behind us, we expect housing to show persistent signs of weakness in 2011. Despite a temporary uptick in spring as homebuyers lock in low mortgage rates, home pri ces and sales should trend lower for the year, shedding an additional 5% from current levels. The commercial real estate sector will also remain anemic and while commercial property prices seem to have stabilized, significant time will be required to absorb the large amount of vacant office and commercial space before we see any meaningful increases in construction in this sector.”

As for the big picture, Register reporter Mary Ann Milborn tells us that Puri and Farka project O.C. to add 20,000 jobs in 2011!

Price Cutting Rules Luxury Homes Market

Laguna home near Montage: one of county’s priciest listings at $36 million

By Sherri Cruz

Sunday, January 30, 2011

Prices for upscale homes here are off as much as 40% from the market’s peak four years ago, fueled by a new round of price cuts on multimillion dollar homes.

In one of the most dramatic examples, what had been the county’s most expensive home—the 18,000-square-foot new Villa del Lago in Newport Coast—was cut from $57 million to $37 million earlier this month.

The cut was done to capture attention, according to agent John McMonigle, who is listing the home and whose development company, Monarch Estates, is handling construction.

The move is in line with the trend for luxury homes, which have required steep discounts to lure buyers.

Corona del Mar’s 22,000-square-foot Portabello mansion, which had vied with Villa del Lago for the title of the county’s most expensive home, sold late last year for about $40 million to technology multimillionaire Fariborz Maseeh.

Portabello was listed in 2006 for $75 million. It later was listed at $49.6 million by McMonigle.

“The high end has taken a pretty big hit in the past year,” said John Stanaland, owner of Laguna Beach-based Stanaland Group and an associate for Hom Real Estate Group Inc. “It’s somewhat stabilizing, but still coming down a bit.”

Prices for oceanfront homes in Laguna Beach and Newport Beach—the top end of the market—began falling in 2008, about two years after the larger housing market here.

Oceanfront homes now are 15% to 20% less, according to Stanaland.

At the peak, oceanfront homes were selling for about $2,900 to $3,300 a square foot, he said.

During the first six months of 2010, they sold at $2,100 to $2,400 a square foot. In the last six months of 2010, they were at $1,600 to $1,850 a square foot.

Relative bargains can be had at newer developments such as Newport Coast, which is seeing its share of short sales.

Foreclosures and short sales that have depressed the overall market have crept into the luxury market, Stanaland said.

“Short sales are pretty much a guaranteed sale,” he said.

Some homes are holding their own.

In January, Stanaland Group closed a sale of an oceanfront home for $3,000 a square foot and listed a home at 990 Ocean Front in Laguna Beach for $3,066 a square foot.

Montage Premium

Stanaland has one of the priciest listings in Laguna Beach: a 9,000-square-foot ocean view home at 7 Atelier Lane next to the Montage Laguna Beach hotel. It has an asking price of $36 million, or $4,000 a square foot.

“People tend to pay for the Montage as much as the property,” Stanaland said.

The home has been listed for about a month and has had some interest but no offers yet, he said.

Homes seeing big price cuts are ones that have spent longer on the market or are being re-listed after time off the market, according to agents.

A luxury home generally takes three to six months to sell in a seller’s market. In this market, some homes have been listed for more than a year.

“The high end is still trickling downward because owners weren’t forced to sell when the crisis first hit,” said Vincent Bindi, co-owner of eVantage Real Estate in Laguna Hills. “Since they weren’t desperate sellers, they’ve been reluctant to list their homes at the price needed to sell in today’s market.”

In recent months, homes in Corona del Mar, Newport Coast, Newport Beach and Laguna Beach have seen price cuts, according to Seattle-based online housing brokerage Redfin.com.

An eight-bedroom, 11-bath home at 2900 Ocean Blvd. in Corona del Mar listed by Newport Beach-based Hanold Properties now is $13.5 million, down from $21 million.

“None of the overpriced properties are going to sell well,” said John Evans, owner of Coto de Caza-based Evans Group and an associate with Ladera Ranch-based Weichert, Realtors-Gold Coast.

Sale Price on Seacliff

Homes he’s reduced include 31721 Seacliff Drive in Laguna Beach. It’s now selling for $11.5 million, down from $18 million. The home is embedded into the bluff and overlooks the ocean.

“When you’re inside, it’s almost like being on a ship,” Evans said. “You see the beach on both sides. When you look straight out in front you see water.”

The home has been listed for more than 18 months.

Evans has about 10 homes for sale in Coto de Caza—five listed, five unlisted.

The homes have been slow to sell, according to Evans. But he said he’s been doing a number of showings since the start of the year. February through May is typically prime selling time.

“I’ve had more showings this month than last year,” Evans said. “My gut feeling is it’s getting better.”