You're going to get a kick out of this. Every Saturday morning for several months now, the LA Times has a Coldwell Banker, glossy covered, full color, 80 page or so, magazine style, real estate supplement in the coastal Orange County area. It is very classy. Nothing in there for less than $750,000 and damn few of those. Most are between one and three million dollars, with a significant few in the thirty to sixty million range or even more. Believe me, some of these places aren't all that nice. One of them is what's got to be a fifty plus year old double wide mobile home in a park a couple blocks from the Main Beach in downtown Laguna. $750,000 too much, you say. Nonsense, they are asking a million four, the price is firm and you still got to pay the space rent, baby!
Nothing has sold in my area now for several months, despite frequent open houses by agents, with lots of signs, flags and prices cut by 20% or more. People still believe their house are worth something, because there have been few foreclosures in the area, despite a flagging economy and staggering inflation that has to be cutting deeply into the economic health of even the local affluent, many of whom have more cash flow than actual assets.
It's clear the real estate brokers are wasting their money on these supplements and that the real reason they are being published, is to placate the sellers. The question is why? At current pricing, none of these properties will sell and not even significant reductions in price will change that. I'm not sure a savvy buyer should be buying any real estate right now, unless it could be rented for a substantial positive cash flow with a minimum down payment. Even though rents are still high, vacancies in the coastal areas of SoCal are increasing and purchase prices are nowhere near levels that would support real rental income. Some of these places are still appraised so high, for tax purposes, you'd have a hard time paying the property taxes for what you'd get in rent.