Fresh out of its slowest year in decades, the Laguna Beach real estate market seems ready to recover as it maintains a steady stream of sales and home buyer inquiries toward the end of the first quarter. This week, the South Coast city has a total of 585 homes on the market, with only 157 being sold as foreclosures. By contrast, for much of 2009, distressed home sales accounted for almost half of Laguna Beach real estate inventory.
Although generally considered negative, the high proportion of distressed homes served as a bait for many buyers. With short sale homes going for as much as 40% below market value, many buyers, including a good number of first-timers, were able to get their hands on Laguna Beach homes which would otherwise have been out of budget. This in turn increased market activity, marking slight but steady increases in Laguna Beach real estate.
Home prices in Laguna Beach are currently holding steady compared to their 2009 rates, a sign that the worst of the housing crash is over. The median price for the current Laguna Beach home inventory is a little over $1.5 million—still below the pre-recession peak but well above the expectations posed earlier in the year. It also keeps Laguna Beach within the upscale range in Orange County, where the median is at $490,000.
Even Laguna Beach short sales and foreclosures are comfortably in the high end, averaging $1 million in the past week. The number has remained steady so far within the month, but with government efforts to reduce the distressed inventory, this is expected to go down particularly as interest from buyers and investors remains high. It has also enabled many to take advantage of the home buyer tax credit to invest in Laguna Beach real estate, which imposes a cap of around $800,000 on the prices of homes purchased.
Another thing that can boost interest in Laguna Beach homes is the attractive mortgage rates. In the past week, interest rates for 15-year and 30-year fixed-rate mortgages both went down slightly: the former from 4.578% to 4.560% and the latter from 5.132% to 5.115%. These two remain the most popular, not just in Laguna Beach real estate but for the housing market nationwide. Adjustable-rate loans, on the other hand, saw a general increase in rates: they now range from 3.228% to 3.526% across a range of structures.
While Laguna Beach still has a long way to go before it’s back to its peak days, it is certainly one of the best bets in the luxury market to achieve full recovery. Its ideal location, steady industry, and constant stream of buyer and investor interest ensure that the Laguna Beach real estate market will improve in 2010, and will become even more attractive in the coming years.
