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Tuesday, Dec 5, 2023

Laguna Luxe Deals See Shift

For luxe listings in Laguna Beach, it’s all about finding the right price—for the seller.

Similar to other pricy Orange County markets, the coastal town has been experiencing a decline in sales volume and pricing in the past year, prompting many homeowners to list their estates for perhaps less than they had expected.

There’s a sweet spot for sales in coastal markets, according to John Stanaland, one of the top luxury brokers in the city.

“Homeowners can’t overprice their properties, or they will sit on the market,” said Stanaland, also a Laguna Beach native.

“A lot of sellers haven’t realized what is happening in the market, or they don’t want to believe it.”

Fewer $10M+ Deals

The trend is notable for the priciest of pricy homes in the area.

So far this year, there have been eight home sales in the $10 million and above range in Laguna Beach, compared to 14 sales during the same time in 2018.

The average sales price for those $10 million and above deals was $16.1 million, according to online brokerage data.

“The market slowed down dramatically in 2018, and that has carried over into 2019,” Stanaland said, adding that after the recession hit, from 2008 to 2011, the market rolled back 50% on average. That loss was made up and then some, recovering an additional 12% to 15% through 2017.

“Between 2018 and now, we’ve lost about 12% on average, so we are back to the peak we hit prior to the last downturn,” said Stanaland.

He expects prices to continue to gradually adjust in the next couple years, though he cautions potential buyers waiting on the sidelines that another major downturn isn’t likely.

“There will definitely be continued downward pressure on pricing, though some pockets of OC are still hot, like Crystal Cove, Irvine Cove, and parts of Newport Beach.”

New is King

This market calibration could be the effects of reaching a new peak, Stanaland notes, though another catalyst for the market dip could be new limits placed on state and local tax deductions, slowing demand.

“It’s a deterrent for homebuyers, especially in Laguna Beach, where over 50% of the [high-end] market is second, third, fourth homes,” said Stanaland.

Stanaland’s Laguna Beach clientele is less international, more close to home, with buyers from California, Las Vegas, Arizona, and Texas.

All are currently “very price sensitive,” turning away from something that feels overvalued.

So what is selling?

New construction, though very few and far between, is quickly nabbed up—Mark Cuban’s new home in the Montage Residences was one that Stanaland brokered for $19 million (see story, this page).

The most expensive listing in Laguna Beach could go for the full price.

Compass’ Rob Giem has the listing for 2431 Riviera Drive, a 10,000-square-foot estate with a $44 million price tag.

“I think he could get that price, especially because it’s in Irvine Cove,” Stanaland said.

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