Orange County’s luxe residential market may have lacked blockbusters in 2023, but it made up for it in bulk.
The county’s top 25 residential sales totaled a cumulative $624.7 million last year, or $25 million on average.
That’s up 1.3% from the $616.5 million in sales volume seen in 2022 for the top 25 sales, and not too far off from the record haul of $668 million seen in 2021.
The slight boost in sales for 2023 came without a single deal over $45 million; there’s been four such deals made since the start of 2020, a time when OC saw a new mark for most-expensive home sale set a few times.
The current high mark, the $70 million paid by hedge fund exec Joseph Edelman for a home in the Laguna Beach community of Abalone Point, was set in 2021.
This year’s list of Top Home Sales of 2023 begins on page 30.
Interest Rate Reaction
Luxe brokers say the local market for ultra-expensive homes was a mixed bag last year.
The region saw reduced sales activity, but homes generally sold for more than in 2022.
High interest rates combined with low inventory are to blame, brokers said.
“We lost a segment of the buyer pool that was financing the properties,” John Cain of Pacific Sotheby’s International Realty told the Business Journal.
Though the vast majority of luxury buyers pay in all cash, many, especially those whose fortunes are tied to their business operations, grew reluctant to transact as a result of interest rates that have more than doubled since 2022.
“You only want to go to the beach when it’s sunny, and you only want to buy homes when the economy is strong,” Coldwell Banker Realty’s Tim Smith told the Business Journal.
Most national economic forecasts for 2023 predicted rising rates and other factors would lead to a recession during the year, which ended up not occurring.
Overseas Buyers
Despite the downturn in sales activity in 2023, prices for luxury OC homes continued to rise last year—albeit at a slower rate than in prior years since the onset of the pandemic.
That’s because demand for the region, even with its reduced buyer pool, remains high compared to other markets.
Buyers in OC have a “scarcity mindset,” Luxe Real Estate’s Paul Daftarian told the Business Journal. “There’s such a limited inventory, especially on great properties, so people are willing to spend up when they find the home they really want.”
Interest in OC’s luxe market comes from in-state and overseas.
Several buyers on the Top Home Sales of 2023 list hail from Asia, including at least one area buyer who is reported to be a billionaire, Wong Luen Hei, the head of building materials firm China Lesso, which has its U.S. base in Corona.
Properties in OC over the past four years have gained national and global attention for their sprawling estates, proximity to picturesque beaches and high-end shopping centers.
“The number of out-of-state buyers has increased three to four times” over the past few years, Smith said.
The region has also seen a boost from in-state, out-of-county buyers since the pandemic, especially from urban areas like Los Angeles.
Top Neighborhoods
The top sale in OC for 2023 was 156 Emerald Bay in Laguna Beach, a cliff-front home with beach access at the exclusive Emerald Bay community that traded for $43 million in an off-market deal. Rob Giem of Compass handled both ends of the transaction.
Two deals from Emerald Bay made this year’s list. In 2022, the community saw the second-priciest deal of the year, a just-built, $43.5 million beachfront home bought by the billionaire Fertitta family.
OC’s second-priciest trade last year totaled $34 million, for an 11,200-square-foot estate at 1 Shoreridge in Newport Coast.
That deal set a new record for the Pelican Crest community.
The home, built in 2010, underwent an extensive, multimillion-dollar remodel before it hit the market. The sellers upgraded its floor plan with additional bedrooms and amenities, such as a Yves Saint Laurent-themed walk-in closet, a golf simulator and a full-scale gym with a PRx weight system, Tonal and infrared sauna.
The improvements more than doubled the home’s value; the sellers paid $14.7 million for the property in 2021.
Luxe Real Estate’s Daftarian and Abraham Lim of Circa Properties Inc. co-listed the property with the sellers, Robert and Ami Douk, while Daftarian alone repped the buyer, Chris Bucci, chief executive of Ground Control Business Management, a financial services company for Hollywood talent and execs as well as pro athletes and entrepreneurs.
Newport Coast dominated in the top deals list for last year. The community last year saw seven sales, ranging from $17.8 million to $34 million.
Irvine’s highest-ever home sale, a $25 million Shady Canyon home that records indicate was bought by investment exec Chad Peets, was the only inland deal to make the list.
Dana Point counts five homes on the list, including three of the top 5 deals.
Securitized Living
According to brokers, last year’s most popular properties all possessed three qualities in common: a newly renovated or newly built home; securitized, gated living; and ample amenities, which range from beach access to proximity to shops and dining, among other lifestyle offerings.
Such homes can be found scattered throughout the coastlines of OC, in Newport Coast’s Crystal Cove and Dana Point’s Monarch Bay and The Strand.
Among those trades is 51 Strand Beach, which sold for $32.3 million in the third-priciest deal last year. The sale neared Dana Point’s record of $33 million, set in 2022 by 63 Monarch Bay.
The roughly 212-home Monarch Bay community last year saw two sales just below the city’s record: 37 Monarch Bay, which traded for $32 million and 39 Monarch Bay, which sold for $31.5 million.
Both deals took the top fourth and fifth spots last year, respectively.
2024 Market
Most of the top home sales took place from January through September, but the rest of the market saw more movement during the latter portion of the year.
“Towards the end of the year, as interest rates settled, we saw a notable increase both inquiries and property showings,” Compass’ Giem told the Business Journal.
The market so far this year has fared better than last year’s.
Pacific Sotheby’s Kim Bibb, whose $27 million sale of 2112 E. Balboa Blvd. in Newport Beach ranked No. 8 last year, said she’s already closed six deals since the beginning of 2024.
“We started off very strong,” she told the Business Journal.
Though rates are projected to fall later than anticipated, Bibb as well as other brokers are confident that this year will be busier than last.
“I’m pretty bullish on the trajectory of the market,” Cain said.
As sales pick up this year, home prices will continue to rise, according to Daftarian.
“We’re not at the peak on prices,” he said. “There’s going to be more inventory when rates drop this year, and properties will be harder to sell.”