Are You Thinking about Living in Newport Beach, CA?
Newport Beach is a small coastal town featuring 22 square miles of ocean and is known to have the largest pleasure yachting harbor in the world. It is located 45 miles south of Los Angeles and 90 miles north of San Diego. It is and has been home to movie stars, sports stars and CEOs for decades and is considered one of the premiere cities in Orange County.
In addition to having many wonderful activities available within its city limits, Newport Beach is only 20 minutes to Disneyland, 30 minutes to Knott’s Berry Farm, an hour away to many other attractions in Los Angeles, and only 1 ½ hours to the snow.
Newport Beach has quite a list of famous residents both current and past. Arguably the one with the longest lasting effect on Newport Beach is The Duke, John Wayne, who made his home here, living waterfront on the Newport Bay. Now, the local airport is John Wayne Airport. Novelist Dean Koontz calls Newport Beach home. Other movie star residents include Shirley Temple, Nicolas Cage, Michelle Pfeiffer, Bo Derrick and Kelly McGillis. We even had Joey Bishop, a member of the Rat Pack. In addition, there have been many sports stars who have called Newport Beach home. Perhaps the most notable sports star to live in Newport Beach are NBA stars Dennis Rodman and our current resident hoop star, Kobe Bryant.
While the star power of Newport Beach is undeniable, the average citizen also enjoys Newport Beach for all it’s worth. With a per capita income of $86,586 (more than 25% of the households have an income of more than $200,000), and a crime rate that is just a fraction of the county’s, residents are able to live comfortably and fully explore all that the city has to offer without hesitation.
Why People Want to Live Here?
Newport Beach is a huge draw in the summer months due to its amazing beaches, water sports, and overall idyllic Southern California lifestyle. When the days get long, the population of the city grows from 72,000 people to just over 100,000. Vacation rentals reach maximum occupancy, and the local nightlife reaches the pinnacle of summer fun. It’s no surprise that Newport Beach is the center of beach life in Orange County as it enjoys the cool breeze from the Pacific that keeps the average high temp around 80 degrees, with low temps rarely dipping below 50.
Newport Beach was in the forefront of the green movement 19 years ago when it decided to make recycling easy for all of its residents. If you want to be green, but don’t want to take the extra measure of sorting, Newport Beach is the place for you. Newport Beach does not require its residents to sort their trash into separate bins for glass, plastic, etc. Just throw all of your trash in the bin, and the City will take care of all of the recycling for you. With no muss, no fuss, you are helping the environment.
Economy and the Effect on Home Values
It is well known that the state and national economies have had a dramatic impact on nearly every aspect of our daily lives. Real estate values are certainly the beginning and end of the vicious cycle of our current economic downturn. Home prices throughout the county and state have tumbled, and the values in Newport Beach have as well. The average price for a house in Newport Beach peaked in 2007 at $1,935,428 and have declined by 32.3%. However, over the last year, values in Newport Beach have remained flat or increased as much as 28% in 3 of the 4 zip codes within the city since 2010 with a current median value of $1,311,181. While there are several factors contributing to this, the main reason is of course the beachside homes that are the driving force behind this relative stability.
Newport Beach homes in neighborhoods away from the beach are still moving briskly as they’ve become more affordable, but the beach front homes are taking much longer to sell. This is another result of the current economic conditions. In case you thought wealthy people were not affected by this recession, it has greatly reduced the number of buyers for homes in this price range. There is no doubt that most people would love to live in a beach front home, but the ability of those people to finance or pay for homes in this price range, called effective purchasing power, has been cut dramatically.
Where do Home Values go From Here?
As mentioned previously, the most expensive homes in Newport Beach are taking longer to sell due to a sharp decrease in the numbers of potential buyers in the higher income ranges. The sellers of these homes are typically entrepreneurs or business leaders who frequently are able to hold their properties through a recession. This ability to resist selling at a ‘loss’ is keeping the higher home prices relatively stable or even showing appreciation in the most desirable areas. The higher valued homes are also typically not influenced by government programs like first time home buyers’ tax credits or changes to FHA financing guidelines due to their high market value.
That said, there are currently about 100 homes listed for sale that are below the FHA financing limit of $729,250. Of those homes, more than half are below $500,000, making the dream of living in coastal Orange County very attainable.
It is likely the home values of Newport Beach will follow the same direction as Orange County, with many experts anticipating overall price stability or light depreciation in sporadic neighborhoods. There may well be opportunities for investors or cash buyers to jump on a property here or there that is priced below market, but overall the average home buyer would be smart to take advantage of the favorable financing terms available right now combined with the lower home prices. While they may lose a small percentage of home value in the short term (6-18 months), they will be enjoying the Newport Beach community and potentially securing their economic future in the long run.
Words of Wisdom for Sellers
Today’s buyers can afford to be picky, and they are. There are currently many months of inventory on the market (meaning how long it would take to sell all the homes currently for sale). Therefore, you need to make your home stand out. The best way to do that is to have your home is properly staged and looking it’s very best. It is hard for buyers to picture what your home could look like, so do the work for them. If you want to avoid having your home for sale for many months or even years, making sure your property is priced correctly to attract the buyer with the best offer is key to standing out in the current buyers’ market. As part of Donovan Group’s service to our home sellers, each home is analyzed by our brokers and staff appraiser to ensure that you are priced competitively.
Preparing to Buy
With so many homes on the market, there is much for you to choose from. Make sure that you know what is important to you about buying a home and be certain that you have been pre-approved for your mortgage or that you have proof of funds if you are buying with cash. If you’re willing to update, try to look past the need to update a home or color choices, This can give you the ability to pick up a well-priced property that others may not offer on because it doesn’t look perfect. Keep in mind that even though it’s a buyers’ market, if a home is in great condition and well-priced, there may be other buyers who want it too, and waiting too long can cause you to lose your dream home. Donovan Group’s buyers are always well informed by our brokers, appraiser, and trusted general contractors whenever necessary.
Buyers in the Real World
Reasons for living in Newport Beach are as varied as the people who live here. One of our buyers was sitting in the sands of Afghanistan serving our country watching episodes of the tv show “the OC” when he decided he should be sitting in the sands of Newport Beach instead. When he returned to the United States, we helped make his dreams come true by finding him a home from which he could walk to the beach and surf.
Realtors and Technology
The huge majority of buyers are searching online for their homes today (according to NAR it was 89% in 2010), so having a home that is not readily found is a huge mistake for any seller. If your house isn’t seen, it won’t be sold. So, be certain that your agent has a strong internet presence and online marketing plan to make sure that your home is exposed to the largest number of buyers possible. My online marketing plan is extensive, and I would love to take a few minutes to share it with you.
For buyers, technology can limit the time it takes to find your new home. Google Earth can be used to view location, back yard, front yard, and the multiple listing service and virtual tours can help you decide if viewing a home is worth your time.
Technology also allows a potential buyer to do more research into a community and helps attract more eyes to listings which is why we have created blogs and sites such as 365ThingsToDoInNewportBeach.com. Also, using social media such as Facebook and Twitter allows us to provide more exposure to our listings while helping our buyers.
About Christine Donovan – When buying or selling a home in coastal Orange County, you benefit from my local knowledge, a background in real estate, mortgages & as an attorney. If you want your home exposed to the most buyers, contact me today.
Copyright © 2011 by Christine Donovan, All Rights Reserved. Are You Thinking about Living in Newport Beach, CA?