Some of Orange County’s most expensive homes aren’t as expensive as they used to be.
A number of posh homes costing more than $10 million near the coast have seen their prices slashed as much as 25% as of late, based on Realtor data provided by online broker Redfin.com.
Among the more notable cuts: A home up for sale on Newport Beach’s Lido Island this month had its asking price cut by $2 million, to just under $14 million.
The five-bedroom, seven-bathroom home at the southern tip of the island has been on the market for about six months.
The seller of a $14.9 million home that’s been listed nearby on Linda Isle for about five months since has dropped the asking price to $12.7 million.
Those aren’t the biggest reductions seen lately. In Corona del Mar, a six-bedroom home near the beach was originally listed at $16.5 million, but now is back on the market for about $12.7 million.
On top of that, the difference between the asking price and the ultimate sales price of high-end homes continues to see a gap of as much as 10%, according to area brokers.
That’s on par with last year. In 2006, the top 10% of homes sold in Newport Beach traded at about 93% of their list price, while in Laguna Beach the priciest homes sold for about 90% of their list price, according to data from Hom Real Estate Group, a luxury home brokerage based in Newport Beach.
Whether the lower prices are evidence of a downturn for OC’s luxury-home market remains to be seen. During the same time, buyers shelled out some of the highest ever dollar amounts for homes in the area.
One off-market sale in Laguna Beach’s Irvine Cove took place in July for $38 million,a record high for an OC home sale, area brokers said.
And on Laguna Beach’s Victoria Drive, a newly built 10,000-square-foot home is said to have just sold for its list price of $31.5 million.
The lower prices and slow sales of higher-end homes are similar to what is being seen for more moderately priced houses in the county, brokers working on coastal properties said. The best properties in the best locations are seeing near-record sales, while slightly less appealing homes are having a hard time getting the prices sellers expect.
“What you’re seeing with a lot of these houses over $10 million that aren’t selling is that they don’t belong in that category. They’re not worth $10 million,” said Rob Giem, managing director for Hom Real Estate Group.
“It’s a challenging environment. Volume is down, but prices for the most part continue to hold,” Giem said. “(Some) sellers may not have noticed that the market has hit a plateau, though, and they’ve had to come back to reality.”
In the case of the Lido Island home, a sale near its new listing price would still be a big gain for the current owner, who bought the home in 1992 for $4.5 million, according to Redfin.
The waterfront home is the most expensive home listed for sale on Lido Isle, by far. Of the roughly 20 or so other houses listed for sale there, the second-highest home runs $6.2 million. The cheapest home there is about $1.7 million.
Setting a price for a high-end home leaves a lot of room for second-guessing.
“There’s greed and then there’s unreasonable greed,” said Bill Cot & #233;, a luxury broker in Corona del Mar.
Many homes have list prices that veer into the second category, due to inflated expectations of the sellers, he said. Brokers that willingly list those homes at too-high asking prices aren’t giving their clients the best advice, according to Cot & #233;.
This is one big reason the average listing time for coastal homes priced at more than $10 million has risen to more than 200 days. A few years ago, 90 to 120 days was the average, Cot & #233; said.
“That’s absolutely the case,there are a lot of examples of people not pricing realistically,” said Gary Legrand, president of Newport Beach-based Surterre Properties.
“Right now, if the property is priced right, it will sell in a reasonable time. But if it’s priced just the way a seller wants it,” it will sit, Legrand said.
Surterre still is seeing sale volume in the market comparable to a few years ago, though there was a dip toward the end of the summer. The company counted $129 million in coastal sales in July, and $116 million in sales in August, Legrand said.
It takes more than a Laguna Beach or Newport Beach address to command higher-than-expected prices, Cot & #233; said.
Sales right now “depend on the areas within the areas. There are some pockets that are on fire, and some that are not,” Cote said.
Irvine Cove and Emerald Bay remain strong areas, though they aren’t immune to price cuts.
In Laguna Beach, an Emerald Bay property recently cut its list price by $1.1 million. The five-bedroom home on the beach now is going for $16.9 million.
Further inland, brokers say Shady Canyon in Irvine is seeing a harder time with sales.
Online data shows close to 20 homes in Shady Canyon, the 400-home Irvine Company development, up for sale. Brokers say that figure is actually closer to 40 homes. One home in the development, bought for nearly $4 million in early 2006, is now on the market again for $3.2 million.
Not all high-end homes that have been on the market for a while are cutting their list prices. The $75 million Corona del Mar home of Bellevue, Wash.-based software maker Attachmate Corp. founder Frank Pritt still is listed for $75 million, according to Redfin.
