More Distressed Laguna Beach Homes Listed

From: Laguna Beach Homes
Published: Sat Apr 17 2010

As one of the most expensive real estate markets in California, Laguna Beach has always enjoyed a certain privilege over other neighborhoods. That doesn’t mean, however, that the Orange County city is immune to the blows of the economic recession. In fact, more Laguna Beach homes are entering the market as short sales and foreclosures??"a sector known as distressed homes??"a sign that even the rich and famous are feeling the crunch.

According to Steven Thomas, a broker from Aliso Viejo-based firm Altera Real Estate, distressed homes made up 8.4% of Laguna Beach real estate inventory this week, up slightly from 8.1% two weeks ago. The number has stayed more or less the same from late March to early April, which has led some experts to believe that the increase is just an effect of the early home buying season and that the surge will only be temporary.

A short sale is an agreement between a homeowner and his mortgage lender that allows the former to sell his home for less than the amount owed on it, usually because the home has negative equity or the borrower is no longer able to afford the mortgage. On the other hand, a foreclosure involves the seizure and takeover of a home whose owner has stopped making due payments and failed to bring the mortgage current within a given time frame.

There are currently 357 Laguna Beach homes up for sale; of these, 30 are either short sales or foreclosures. The ratio has increased significantly in the past few years as a result of the economic recession and subsequent housing crash, but with various foreclosure prevention programs from the Obama government, such as the Home Affordable Modification Program and its sister projects, the figures have stabilized in recent months.

Across Orange County, there are currently 2,814 distressed homes for sale, accounting for 31.6% of the active inventory. High-end properties such as Laguna Beach homes did not make up a large part of the total, but were also on the rise for most major neighborhoods. While still above average, the ratio has already improved from last year, when distressed properties exceeded 4,000 and made up over 37% of the inventory.

Thomas also noted that foreclosures have dropped significantly countywide, with only 418 active listings on the market. This is partly because of the faster market times for foreclosures, which averaged 1.03 months in the past two weeks??"a very seller-friendly market. In comparison, market times for Laguna Beach real estate often reach double digits and in some areas even go over 12 months, making it a deep buyer’s market.

As for short sales, the active listing inventory currently contains 2,396 listings, down slightly by five homes from two weeks ago. In Laguna Beach, many of these homes have had to slash their prices to encourage more buyers and work with the restrictive time frame given to short sales. Short sales are also quick to sell with a market time of 1.67 months, although Laguna Beach homes may take longer because of their upscale prices.

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