It was a very interesting year in the community of Lake Forest in South Orange County for the high-end real estate market. Why.. there was a huge increase in the number of sales for high-end homes. I am classifying high-end home as any home that sold for over $1,000,000.
Now you may think... a million dollars; that really isn't high-end for South Orange County when the most expensive home in Orange County sold for $45,000,000 in Laguna Beach! But for the community of Lake Forest over $1,000,000 is certainly high-end. What is more interesting to note the number of sold properties over the $1,000,000 price tag in Lake Forest increased by 60%. In 2015 18 homes sold over $1,000,000. In 2016 that number was 44, with 44% of those homes sold in Baker Ranch, i.e. New Construction. The rest of the city the number of sales over a $1.000,000 broke down as follows: Lake Forest North/South (i.e.Lake) 14, Portola Hills 3, Foothill Ranch 1.
Below is a snapshot of the top 10 homes sold in Lake Forest in 2016:
As you will note, 8 of the these homes were new construction, built 2014-2016.
Below is a look at what were the top 10 home in 2015:
In 2015, 4 out of 10 homes were in Baker Ranch and 4 homes were in Portola Hills.
The big news here is price gains..the median price for a 3000 square foot home in 2015 was $1,050,462 and in 2016 was $1,555,766, that equals a 33% increase in values. However, it is important to iterate 8 of the homes sold in 2016 were brand new!
So what does that mean for resale homes in Lake Forest? Are they being sold too low? Was there enough inventory of resales to compete with new builds? Remember all real estate is local and that drives down to the neighborhood. As well, comparing new vs old is not comparing apples to apples.
However, we certainly have seen an increase in demand for Lake Forest higher end homes. Of course, low taxes, no mello roos, good location, good schools we should certainly see demand pick up, especially from our neighbor Irvine. I am a bit surprised we didn't see more in Foothill Ranch and Portola Hills. For Portola Hills, 2017 should be interesting with the sales closing and move-in's happening at The Oaks.
But I think the key here is NEW.. Buyers love to look at New Homes and if they are going to spend a $1,000,000 dollars then your resale needs to compete aesthetically to those brand new homes on the market. It is your competition. Lot size and views only take you so far. My second thought, I don't believe there were enough resale homes over 3000 square feet available in 2016, which drove buyers to the new builds.
So if you are thinking of selling your home in 2017 and expecting to receive over the $1,000,000 price tag, make sure your home looks like a model when it hits the market. With the low inventory we currently have homes priced right, well presented and available should provide you top dollar. As well, if you are looking to buy an Estate home, make sure to contact us as we have relationships with many of the new home developers and it is always good to have someone on your side when buying new.
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