Laguna Beach Real Estate Magazine
December 2022: 2022 Review & 2023 Outlook | Edition #90
January Surge in the Forecast: Few Sellers, Fewer Buyers
Laguna Beach real estate’s post COVID journey has been extraordinary. April 2020’s median was $1,475,000. Fast forward twenty months of robust demand and collapsing supply to December 2021 and the same monthly median was at $3,795,000 – a stunning 157% rise. Last June, after massive rate hikes emasculated demand, median prices corrected to $2,365,000. By August, we were back at $3,600,000. November and December, as I predicted, monthly prices declined. The median plunged $1,300,000 and finished the year at $2,200,000. Now, with a 94% probability, the monthly median will rise again this month. Likely, the move will be huge. These puppies, clearly, are not done going up.
COVID has been quite the disrupter. Some COVID trends have come and gone. Some are still with us. After the reopening, buyers rushed in. Now, they are mostly absent. In the depths of the shutdown, April 2020, there were there were only 15 closed sales. June 2021, with a pronounced influx of buying, there were 64. Since then, volume collapsed. The number of December closings – at 12 – was the lowest I have ever documented. In fact, the most recent 3-month, 6-month, and 12-month periods all registered the lowest activity I have ever documented. In 2021 568 residences sold. In 2022, 322 residences sold. As best I can tell, this is the largest drop in closing volume, year over year, ever.
Escrow activity mirrors closings. May 1, 2020, there were 29 open escrows. A year later, there were a record breaking 77 open escrows. As of the January 1 that number was 13: an 83% decline. Said another way, it is a good time to be a buyer (Call me). Competing hordes are not out there bidding against you on your preferred property.
Four COVID trends are still intact.
One, buyers – by a factor of 25% - are paying more for smaller homes. The 3-month median dollars per square foot best illustrates this trend. Over October, November, and December the median $PSF was $1,602, an 85% rise since May 2020. In the comparable period the 3-month sold median was up only 60%.
Two, open escrows – by factor of 26% - are more likely to close. The pre-COVID median closing ratio was 64%. The post COVID closing ratio is 81%. Buyers once in escrow are not messing around. They are closing.
Three, few Lagunans are listing their homes for sale. Perhaps they feel trapped with a low interest rate mortgage. Perhaps they do not know where they would go if they did sell. Perhaps they would rather improve their home than sell it. By the way, if you need an awesome Laguna Beach contractor with availability, call me. June 1, 2020 there were 225 residences for sale. As of January 1, 2023, there were only 92: almost half of the 5-year median and the second lowest January I have ever documented. For sure, in the absence of an abundance of supply, Laguna Beach prices cannot go down in a sustained fashion. Certainly, it is a good time to be a seller. Prices are up, your listing will not be competing against multiple comparable properties, and it will get a lot of attention.
Four, – although you would not know it if you follow year-over-year prices – the market is much more volatile. Right out of the gate, May 2020 the sold median was up 54 percent - Laguna’s biggest move ever. December 2021 was up 43 percent. July 2022 was up 44 percent. Rounding out the four biggest moves in Laguna’s history, November 2022 was down 34 percent. By the way, all these moves were forecasted, in real time, in this space, by this broker.
Take a look around my website to access more of the world’s preeminent source of Laguna Beach real estate data and information.
Have an excellent new year!
Laguna Beach Real Estate
December 2022 At-A-Glance
SOLD MEDIAN $2,200,000 - 100,000 | $ PER SQ FT $1,198 - 148 | SUPPLY 7.6 MONTHS + 1.0 | CLOSING RATIO 80% - 8
Laguna Beach Real Estate
Price Forecasts
Short-Term PENDING INDICATOR Forecast for January: Up Signal
Short-Term SPREAD INDICATOR Forecast for January: No Signal
Long-Term PRICE INDICATOR Forecast for 2023: No Signal
Laguna Beach Real Estate
December 2022 Sales Data
Balanced Market 5 to 7.9 Months
Laguna Beach Real Estate
December 2022 Laguna Beach Real Estate Closings
Laguna Beach Real Estate
Median Value of Homes Sold by Year
Sold in Lake Mission Viejo for $3,495,000!
MLS#: OC22025146
Represented Buyer
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