Newport Beach Prices Dropping

[quote author="OC Zed" date=1232008986][quote author="skek" date=1231989713][quote author="Chuck" date=1231987042]I've been keeping an eye on the Harbor View area, Irvine Terrace and the Port Streets. Prices have definately been creeping downward but in my opinion they are still too high. Does anyone have any insight into any of these areas and/or any predictions for where prices will eventually settle? Thanks!</blockquote>


Because these neighborhoods are older, they had fewer peak buyers. I also get the sense that there was less (although not zero) HELOC abuse in some of these neighborhoods. So, the number of motivated sellers is lower. On the other hand, all three neighborhoods rose to unsustainable values, especially the Port Streets. It is a great family neighborhood, and it is on our list for that reason, but it is unremarkable in every other way, but for the fact that it has a Newport address. Price declines will come, but they will be slow. As to where they end up? I'd say 2003 prices. That's my prediction for most of Newport -- 2003 for the desirable neighborhoods, slightly less for the less desirable neighborhoods.</blockquote>


I would disagree on bottoming at 2003 prices as those prices still outpace most Newport incomes. Moreover, you would have a stalled move-up market if every other town fell to 2001/2002 levels and Newport stayed at 2003.</blockquote>


I agree if that if we are going to bottom in Newport at 2003 pricing, it doesn't seem fair, since the difference between '01 and '03 is tremendous everywhere. Even '03 prices on the little fixer bungalows in CDM that were torn down to be replaced with a god awful tuscan monstrosity were outrageous. Other areas seemed high, but Laguna., CDM and Newport seemed excessively high in '03 for what you got. However, isn't hard to use newport incomes to predict prices since you have so many young renters there, particularly on the peninsula? There are a ton of these $40K-$50K single people in Newport that don't even enter the buying equation. Take those people out and average out my uncles and man, the incomes there are reallly high.
 
Jimmy2 from Lansner's blog on the OC Register's site would have a conniption over this thread.



I can't wait to buy his CDM house in foreclosure a year or two from now.
 
[quote author="OC Zed" date=1232032256]Jimmy2 from Lansner's blog on the OC Register's site would have a conniption over this thread.



I can't wait to buy his CDM house in foreclosure a year or two from now.</blockquote>


You and me both! We just might have a bidding war on buying his house, for a price that could never happen, just on general principle alone. I'd love to go on Lansner's blog and say I bought his house for 1998 inflation adjusted prices. Remember, it's called inflation there Dimmy/Jimmy.
 
[quote author="NewportCoastRenter" date=1231894921]Is anybody here following Newport Beach? The price for the home below was dropped an eye-popping $440,000 from $1,389,000 list price to $949,000. I presume this must have gone back to the bank. Any good resources on the Newport Beach/Coast market?



http://www.redfin.com/CA/Newport-Beach/2283-La-Linda-Ct-92660/home/4595781?utm_source=myredfin&utm_medium=email&utm_campaign=listings_update&utm_nooverride=1



Property History for 2283 La Linda Ct

Date Event Price Appreciation Source

Jan 12, 2009 Price Changed $949,000 -- SoCalMLS #U8005029

Nov 07, 2008 Listed $1,389,000 -- SoCalMLS #U8005029

Oct 07, 2008 Off Redfin * -- Inactive SoCalMLS #1

Jul 30, 2008 Listed * -- Inactive SoCalMLS #1

May 09, 2006 Sold $1,200,000 -- Public Records</blockquote>


We viewed this property today. It is a partially (and I stress partially) remodeled home which needs $$$ of work. While it does have some cool features (poured concrete floors, which unfortunately are cracked in many sites, nice remodeled kitchen, bonus room with bar and pool table, nice sized pool) there were way too many fixer features (all original baths, original windows, awful looking exterior needing new siding, paint, etc). It is presently tenant occupied, and it is shocking to me that this was purchased for 1.2 million.
 
More than a few posts have expounded on the stickiness of prices in Newport Beach and Irvine. Many very good reasons have been given for the slower downward price movement in these areas and they all seem reasonable.



And some folks are daring enough to give reasons why prices will stay sticky in these areas or why prices will eventually fall at the same rate as other areas or even faster.



Here is my prediction for when prices will fall hard in Newport Beach, and by extension, Irvine.

Prices will collapse, yes collapse, in Newport Beach when PIMCO collapses. And it will.
 
[quote author="awgee" date=1234224062]More than a few posts have expounded on the stickiness of prices in Newport Beach and Irvine. Many very good reasons have been given for the slower downward price movement in these areas and they all seem reasonable.



And some folks are daring enough to give reasons why prices will stay sticky in these areas or why prices will eventually fall at the same rate as other areas or even faster.



Here is my prediction for when prices will fall hard in Newport Beach, and by extension, Irvine.

Prices will collapse, yes collapse, in Newport Beach when PIMCO collapses. And it will.</blockquote>
Why do you think PIMCO will collapse?
 
[quote author="usctrojanman29" date=1234233715][quote author="awgee" date=1234224062]More than a few posts have expounded on the stickiness of prices in Newport Beach and Irvine. Many very good reasons have been given for the slower downward price movement in these areas and they all seem reasonable.



And some folks are daring enough to give reasons why prices will stay sticky in these areas or why prices will eventually fall at the same rate as other areas or even faster.



Here is my prediction for when prices will fall hard in Newport Beach, and by extension, Irvine.

Prices will collapse, yes collapse, in Newport Beach when PIMCO collapses. And it will.</blockquote>
Why do you think PIMCO will collapse?</blockquote>


When do you think it will collapse?
 
[quote author="usctrojanman29" date=1234233715][quote author="awgee" date=1234224062]More than a few posts have expounded on the stickiness of prices in Newport Beach and Irvine. Many very good reasons have been given for the slower downward price movement in these areas and they all seem reasonable.



And some folks are daring enough to give reasons why prices will stay sticky in these areas or why prices will eventually fall at the same rate as other areas or even faster.



Here is my prediction for when prices will fall hard in Newport Beach, and by extension, Irvine.

Prices will collapse, yes collapse, in Newport Beach when PIMCO collapses. And it will.</blockquote>
Why do you think PIMCO will collapse?</blockquote>


Because the bond market is next to go, and no amount of hedging will protect them, and the premises and assumptions PIMCO has been using are flawed and about to become exposed.



<a href="http://www.cnbc.com/id/29097805">MBS will become an attractive investment</a>
 
[quote author="Stuff It" date=1234234225][quote author="usctrojanman29" date=1234233715][quote author="awgee" date=1234224062]More than a few posts have expounded on the stickiness of prices in Newport Beach and Irvine. Many very good reasons have been given for the slower downward price movement in these areas and they all seem reasonable.



And some folks are daring enough to give reasons why prices will stay sticky in these areas or why prices will eventually fall at the same rate as other areas or even faster.



Here is my prediction for when prices will fall hard in Newport Beach, and by extension, Irvine.

Prices will collapse, yes collapse, in Newport Beach when PIMCO collapses. And it will.</blockquote>
Why do you think PIMCO will collapse?</blockquote>


When do you think it will collapse?</blockquote>


Within 2 years, maybe 1 and 1/2.
 
[quote author="awgee" date=1234237234][quote author="Stuff It" date=1234234225][quote author="usctrojanman29" date=1234233715][quote author="awgee" date=1234224062]More than a few posts have expounded on the stickiness of prices in Newport Beach and Irvine. Many very good reasons have been given for the slower downward price movement in these areas and they all seem reasonable.



And some folks are daring enough to give reasons why prices will stay sticky in these areas or why prices will eventually fall at the same rate as other areas or even faster.



Here is my prediction for when prices will fall hard in Newport Beach, and by extension, Irvine.

Prices will collapse, yes collapse, in Newport Beach when PIMCO collapses. And it will.</blockquote>
Why do you think PIMCO will collapse?</blockquote>


When do you think it will collapse?</blockquote>


Within 2 years, maybe 1 and 1/2.</blockquote>


Wow, I'm surprised by that prediction. A friend works for them, they have definitely done some restructuring in the past 3 months. They've eliminated some positions, my friend's position was deemed "redundant" but they offered her another job in another department at a 5% pay cut which she snapped up quickly. I think the people over there are pretty smart and may be able to weather this with further reductions in staff, but Awgee, you know more than me, so I'm inclined to believe you.
 
I'm going to make the bold statement and say PIMCO will not fail.



Remember, Gross shakes hands with the gov't.



I could be wrong, but again this is just my humble opinion :)
 
[quote author="sell4u" date=1234241071]I'm going to make the bold statement and say PIMCO will not fail.



Remember, Gross shakes hands with the gov't.



I could be wrong, but again this is just my humble opinion :)</blockquote>


Sell, it is not so bold to say that PIMCO will not fail. You will probably not find one person in here or in 1000 that will agree with me.
 
[quote author="skek" date=1234238969]With great fear and trepidation, I am going to disagree with awgee on this one. PIMCO is politically connected -- they are one of the four (?) firms retained by the government to manage the TARP program with probably more govt contracts to come. More than anything else, their investment strategy is to figure out where the government is going to provide its support and get there first. They will certainly suffer like the rest of us, but I would be shocked to see them collapse to any meaningful extent.



Awgee, you have my blessing to to point back to this post and gloat if the future proves you right.</blockquote>


They are connected.

And they are the smartest.

And the Fed will buy ten years in an effort to keep interest rates low.

And the Fed will fail, along with PIMCO.
 
[quote author="usctrojanman29" date=1234233715][quote author="awgee" date=1234224062]More than a few posts have expounded on the stickiness of prices in Newport Beach and Irvine. Many very good reasons have been given for the slower downward price movement in these areas and they all seem reasonable.



And some folks are daring enough to give reasons why prices will stay sticky in these areas or why prices will eventually fall at the same rate as other areas or even faster.



Here is my prediction for when prices will fall hard in Newport Beach, and by extension, Irvine.

Prices will collapse, yes collapse, in Newport Beach when PIMCO collapses. And it will.</blockquote>
Why do you think PIMCO will collapse?</blockquote>


I'm curious as well. I am well aware of the debacle with the banks and investment banks, but don't know any reason for PIMCO to collapse...
 
Newport Beach will crash regardless of PIMCO's existence. Incomes here do not match the asking prices. Something has to give. Short sales are already dotting the landscape. Significant REO inventory should be hitting the market later this summer.
 
why? you think that is some kind of floor?



depending on the neighborhood, prices were much, much lower than that in the 90s, and will be again.
 
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