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.
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.”