Miles of white sandy beaches, a mild climate all year round, and a host of attractions – Newport Beach embodies the Californian zest for life on the US West Coast. These and many other factors have meant that the harbor city not far from Hollywood has grown into a popular place of residence for a host of famous people. The increased level of demand for exclusive real estate, particularly from wealthy foreign buyers and investors, is seeing a rise in property prices and a further growth in confidence to place capital in secure investments such as real estate.
From lifestyle buyers to investors, the demand for high-end real estate in this harbor town has been a significant trend, despite the economic downturn of the US in previous years. “In the upper market segment we are seeing price rises of between three and nine percent over the previous year,” reports Carole Meikle, Managing Partner at Engel & Völkers Newport Beach.
The house prices in Newport Beach are amongst the highest in whole North America. At the moment, the number of residential properties for sale is at a historic low. “Due to the limited supply on offer, interested buyers have to make very quick decisions if they have viewed a property that they like and that fits their needs. Otherwise the opportunity is soon missed,” Ms. Meikle told us.
The demand comes from those seeking the long views out to the ocean, or direct sea-access specifically in the areas of Newport Beach Waterfront, Newport Coast, Newport Coast-Crystal Cove, Laguna Beach, Dana Point and San Clemente. Additionally, convenience plays a big role in defining the most desirable properties in this area, with proximity to shopping and prestigious schooling being cited as key search criteria, with discreet and secure premises.
Buyers have been looking for breathtaking mansions in premium locations for the purpose of second home or as a stable capital investment. Private buyers often already own several properties in various residential areas in Orange County. This high level of demand from abroad has meant that the average time-to-market for a property has decreased significantly from six to three months over the past twelve months. The market is currently made up of 50 percent private buyers and 50 percent institutional investors. Engel & Völkers Newport Beach is receiving the most frequent international enquiries from buyers in China, followed by buyers located in India and Canada.
With five private yacht clubs mooring locally and the green of two famous golf courses, the area has been an attraction for affluent foreign buyers and investors interested in exclusive and secure real estate. Newport Beach has been attracting tourists and lifestyle-lovers since the 1905, when the Pacific Electric Railway first bought out sun-loving fans to day trips to Santa Ana River, Balboa Peninsula, Corona del Mar State Beach and the beaches at Crystal Cove State Park.
At the premium end of the market, luxurious and prestigious properties spanning an average of 5,000 square feet are in particularly high demand. Sales in this segment cost around 3.5 million US dollars (2.7 million euros) on average. In the more sought-after locations, exceptional villas with particularly high-quality appointment and sea views are reaching top prices of up to 20 million US dollars (15.4 million euros). Buyers are paying an average of 1.6 million US dollars (1.2 million euros) for around 2,200 square feet when it comes to detached family homes in very good locations. In the case of apartments for let in sought-after residential areas, average prices per month are around 3,500US dollars (2,700 euros).
Our OC property expert Carole Meikle is optimistic about the outlook ahead on the residential property market in 2013. Engel & Völkers Newport Beach expects prices in the premium segment to continue to rise as long as the supply is short. The clientele with purchasing power is there and interest rates are low. “We are anticipating that the average house prices in Orange County will continue to rise over the coming five years and are confident that foreign buyers and investors are still willing to invest in high-end property in prime locations,” Ms. Meikle added.
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