Will Newport Beach Homes Get Cheaper?

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by: writomania
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Word Count: 425
Date: Mon, 4 Oct 2010 Time: 8:38 AM
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Mounting foreclosures and short sales have brought many a buyer's attention to upscale markets such as Newport Beach.  Will prices remain the same or go down, and if they do, by how much? Is it a good time to buy?

There's little doubt that Newport Beach homes have become cheaper since the start of the recession. Median prices, once reaching close to $4 million, have been hovering in the $1-2 million range in the past several months. Of course, this is still expensive compared to nationwide averages. Even in its native Orange County, known for its million-dollar oceanfront homes, home prices average $450,000. High prices are part of what slows down Newport Beach homes for sale, but it also shows that they are still highly valued.

Two main factors account for the price drops in Newport Beach homes. One is the sluggish real estate market. As of this week, the city's market time (the time an average home is expected to spend on the market before getting sold) is over eight months. Sellers, in a bid to sell faster, often resort to price adjustments to attract more buyers. At one point, Balboa Peninsula, one of the city's more expensive neighborhoods, topped the list of areas with the most price cuts in Orange County. Some Newport Beach homes for sale have been reported to slash up to $2 million off their initial asking prices.

The second factor is distressed properties-Newport Beach homes whose owners are in financial distress and are either short-selling or in foreclosure. Foreclosures and short sales can go for as much as 40% below market value, as most banks simply want to break even or minimize their losses. Experts have hinted at a foreclosure surge later this year and said that beach towns may be among the first to suffer.

Perhaps the question on most buyer's minds is whether to buy now or wait for the market to stabilize. Unfortunately, there's no single answer-it's a matter of what your goals are and how much risk you're willing to take. It may be a good time to buy if you’re after a quick profit or want to take advantage of the historically low mortgage rates, but not if you want a stable, long-term investment. The best thing to do is consult an agent who can show you Newport Beach homes for sale and help you decide where your money can go further.
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About the Author

Writer of the post Andy Williams, one of Orange County's most successful and respected agents, realized his passion for real estate at a young age and obtained his real estate sales license at the age of 20 while attending college at California State University Long Beach. For five years he managed numerous commercial developments from start to finish. He regularly writes about Real estate related issues. His ideas and analysis on real estate are based upon years of practice. If you are looking for more information, visit: "Newport Beach Home"