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Prices, Selling Times for Richest Homes Tempers from Boom

The strength,and limits,of Orange County’s luxury housing market are on full display in Dana Point’s The Strand at Headlands, where multimillion-dollar homes are under construction along one of the few undeveloped coastal areas in the county.

The 121-acre beachfront development counts 118 custom home sites. As of May, 31 lots had been sold, bringing in $190 million for The Strand developer Sanford Edwards.

Those sales averaged about $6.1 million for each lot, which run about one-fifth of an acre each. Those sales are believed to be a per-acre record for an OC home site.

The first home at The Strand broke ground earlier this year, a 6,700-square-foot Cape Cod-style house designed by Newport Beach’s

CJ Light & Associates.

Custom homebuilder Monarch Estates,an offshoot of Newport Beach luxury broker the McMonigle Group, part of Coldwell Banker Previews International,is building the home. It’s set to be finished by the end of the year.

Monarch Estates looks likely to make a big profit, although not as much as first expected. The five-bed, seven-bath home is being marketed for $19.5 million.

When the property first was listed about three months ago, the asking price was $22.5 million, according to data provided by online broker Redfin.com

Lowering Trend

Decreases in asking and sales prices at the top end of OC’s housing market, and across all Southern California, are becoming common.

Luxury home prices in Los Angeles and OC decreased by 2.2% from the fourth quarter to the end of the first quarter, according to the First Republic Prestige Home Index, a report put out by San Francisco-based First Republic Bank.

Luxury home prices in the area now are off nearly 4% from a year earlier, according to the index, which pegs the average luxury home price at $2.3 million.

“Today, (a sale) has to be perceived as a

bargain,” said Gary Legrande, president of Newport Beach-based Surterre Properties.

In OC’s two most expensive cities, Laguna Beach and Newport Beach, similar trends are being seen, brokers said.

Reports show prices in both coastal areas have fallen modestly in the past year.

For sales in Laguna Beach, list prices went as high as $31.5 million last year, according to H & #244;m Real Estate Group, a luxury home brokerage in Newport Beach.

For the 30 most expensive sales in 2007 the average price was $8.1 million, compared to $8.2 million in 2006 and $5.8 million in 2005.

Those sales,which were the top 10% of Laguna Beach’s total sales,closed at an average of 92% of their list price last year, compared to 90% in 2006 and 94% in 2005.

Laguna Beach homes priced $5 million to $10 million took an average of 89 days to sell. For homes more than $10 million it took 87 days.

In Newport Beach, sales went as high as $20 million last year, according to H & #244;m’s data. For the 95 most expensive sales, the average sales price was $6.3 million, compared to $6.5 million in 2006 and $5.4 million in 2005.

So far this year, Newport Beach has seen a couple of big sales near $30 million each.

2007 Newport Beach sales closed at an average of 94% of their list price, compared to 93% in 2006 and 95% in 2005. It took on average 90 days to sell a home listed at $5 million to $10 million. For homes costing more than $10 million, the average time on the market jumped to 221 days.

Two homes are looking to raise the stakes, with prices in the $75 million range. But one already has been on the market for 800 days.

That’s the case with the Corona del Mar home of Frank Pritt, founder of Seattle-based software maker Attachmate Corp. It’s listed for $75 million.

Since then, an under-construction Newport Coast home has come on the market for even more money. Villa del Lago, a 12.5-acre estate in the hills has seen its price tag increase by $27 million during its construction, which is scheduled to finish in 2009.

The 18,000-square-foot mansion includes a 20-car garage, among other amenities, and is listed at $77 million.

Coldwell Banker’s McMonigle is listing both the $75 million Corona del Mar home, known as the Portobello Estate, and Villa del Lago.

Other big-ticket homes have found success with buyers this year.

January saw a $35 million sale of Nicolas Cage’s former home in Newport Beach. The buyer was Jerry Herbst, owner, chairman and president of Nevada’s Terrible Herbst Inc. The home was listed at $40 million.

A Corona del Mar home previously owned by technology executive Rick Aversano sold for $27 million in May, a record for an off-water property, according to brokers.

An investment group bought the property. The investors intend to lease the house, with an asking price of $55,000 per month, according to H & #244;m’s Rob Giem, who represented both parties.

Inland, a 15,000-square-foot Coto de Caza man-sion sold for $19.5 million in May,a record for Coto.

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Mark Mueller
Mark Mueller
Mark is the Editor-in-Chief of the Orange County Business Journal, one of the premier regional business newspapers in the country. He’s the fifth person to hold the editor’s position in the paper’s long history. He oversees a staff of about 15 people. The OCBJ is considered a must-read for area business executives. The print edition of the paper is the primary source of local news for most of the Business Journal’s subscribers, which includes most of OC’s major corporate and community players. Mark’s been with the paper since 2005, and long served as the real estate reporter for the paper, breaking hundreds of commercial and residential real estate stories. He took on the editor’s position in 2018.
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