Million-Dollar Homes Weigh Down Laguna Beach Market

Laguna Beach real estate has always been known for its sky-high home prices, but its constant inventory of seven-figure homes continues to inhibit market activity and slow down market recovery for the South Coast city.

As of April 5, only 13 homes in Laguna Beach were selling for $500,000 or less. About twice as many homes were selling for over $700,000, many of them—particularly those in the coastal neighborhoods—passing the million-dollar mark.

According to broker Steven Thomas of Altera Real estate, Laguna Beach is seeing both ends of the spectrum: an easy seller’s market for homes under $1 million, and a virtually frozen one for more expensive properties.

Market times for low-end homes, which represent just a small fraction of the inventory, are just over two months, a sign of a healthy market. For million-dollar homes, it can take up to a year or more to sell, even after hefty price cuts.

Demand for high-end homes has always been low, but coupled with a large inventory, it makes for one of the slowest periods in Laguna Beach history. Currently, high-end homes make up only 23% of active listings, but get only 5% of the total demand.

There are currently 329 Laguna Beach homes listed for above $4 million, but demand is only present in 8 of them. At this pace, says Thomas, it will take 41 months—about three and a half years—for this segment alone to sell.

However, open escrows were up by 10% in the past week, which means that more home sales are closing. This increase is expected as spring has rolled in and home buying season has started back up.

 

Earlier in Laguna Beach Real Estate News:
Charge Your Electric Car in Laguna Beach
More Luxury Homes Hit Laguna Beach Real Estate Market
Oldest House In Laguna Beach To Be Rehabbed