Thanks to the soft housing market it takes more time to get a home sold than most sellers would like, and if it seems it takes even longer to sell homes in Newport Beach and Laguna Beach than in many other communities in California, there's a good reason for that.
Homes on average sit on the market roughly double the amount of time in Newport, and nearly triple the amount of time in Laguna than the median for the state, according to the most recent housing data.
"It takes longer to sell a home in Laguna Beach versus Newport Beach," said Tony Bartos, an agent with Coldwell Banker Previews International in Newport Beach.
Bartos notes that data from the multiple listing service (MLS) shows single-family homes in Newport Beach, including Corona del Mar and Newport Coast, sold after 125 days on the market. By comparison, in Laguna Beach detached homes averaged 144 days on the market before selling.
"In Newport Beach," he added, "if we were to exclude the areas of Corona Del Mar and Newport Coast, the disparity is even higher with Newport homes selling in 115 days on average."
But compare Newport and Laguna with the statewide median, and even when those luxury to ultra-luxury markets of Corona Del Mar and Newport Coast are taken out of the equation, the time it takes to sell homes in both communities lags statewide numbers for July. The median number of days it took to sell a single-family home in California was 52.1 days in July, compared with 42.4 days for the same period a year ago, according to data released this week by the California Assn. of Realtors.
The average time on the market was 96 days for Orange County in July, according to MLS data. The average was 78 days for Los Angeles County.
A variety of factors affect the time on the market for a home, experts say, but chief among them appears to be price. Simply put, there are fewer buyers for high-priced properties than there are for more affordable properties.
"Laguna Beach is a spectacular and a very expensive, very difficult place to live," said Dilbeck Realtors' Liz Claus, who is also on the Dana Point Planning Commission. "Like the Four Horsemen of the Apocalypse, it is prone to fire, flood, lack of parking and landslides. It also has a city government that is understandably difficult with building and remodeling standards, including a view ordinance and an architectural review process. Prices on the high end are mega millions and those are hard to justify the price based on other properties in the neighborhood and often have prices picked out of the air because of the uniqueness of the individual property."
Both Claus and Bartos echoed what Gary Boisen, president-elect of the Laguna Board of Realtors, says about home sales.
"The perception is that the homes in our markets sell in about the same time frame as homes in other markets, and at a slower pace as the prices increase," he said. "The reality is that homes that are priced right in any market and price range will sell in a normal time frame, and often times quickly. However, there are still many sellers who are not willing to acknowledge that pricing has dropped significantly over the past five years and they won't adjust their pricing accordingly. It goes without saying that these homes do not sell."
Claus argues that homes for sale in Laguna and Newport are no different from homes on other high-end communities, where she says the time on market is comparable.
"It just takes the right person at the right time," Claus said. "Also the pool of buyers financially able to purchase these properties is extremely small. The same is true for Beverly Hills, Manhattan, Aspen, etc."
Beside the sales pace being sluggish in both communities, Laguna in particular appears to have several hurdles for sellers to overcome in attracting buyers for their homes.
"Laguna is a beautiful community with very desirable location," Bartos said. "However, I think there are several reasons homes there take longer to sell. First of all, homes are generally smaller and older than those in Newport. Lot utility, condition and views vary greatly, making homes in Laguna much more difficult to value accurately. Overall, most neighborhoods in Newport are much more conforming and have fewer variables impacting value."
Other issues impacting Laguna have to do with the type of buyers drawn to the area, the condition of some of these older homes and accessibility, he said.
"Laguna Beach has wonderful beaches and views, but the hilly terrain with small or non-existent yards may not be as desirable to someone which children for example," Bartos said. "Some potential buyers find the commute with access only via Coast Highway or Laguna Canyon Road difficult. So, although Laguna Beach is a wonderful community, the pool of buyers drawn to the area is simply not as large as the Newport Beach area. Certainly lower levels of demand, whatever the reason, will impact the length of time it takes to sell a home."
In praising the communities, Boisen points to one of the reasons sales may sometimes take a bit more time.
"Laguna Beach and Newport Beach are coastal markets that have been impacted by the downturn in the real estate market just like all other communities," he said. "However, buyers still realize the value in owning property closer to the ocean due to the climate, long-term value and demand by buyers from around the world. The market has three broad classifications: luxury/high end, middle and what we will call low end. However, the low end in our markets is typically from around $1.5 million and under."
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