Six years on from the recession that rocked the US property market, California’s Newport Beach has been enjoying an impressive surge in demand. Prices fell by as much as 40% at the height of the recession, but today the picture couldn’t be more different. The area began a dramatic turnaround in 2011, and since then, the recovery has been swift.
Prices have risen by 15-20% in the last year, with the median value of homes in the city sitting at $1 million. Luxury properties regularly go for $20 million and above. It’s easy to see why this area has proved popular, and it seems success certainly begets success. Almost half the population now earns over $200,000 a year, and the accompanying array of upmarket restaurants, designers and business outlets help to make the city a regular feature in the country’s top ten most expensive locations.
The two key factors in the property market’s resurgence in Newport Beach are a renewed confidence in property from buyers and a limited supply of homes on offer in the top bracket. This newfound confidence can be found not only in seasoned buyers, but also in newcomers to high-end real estate. Carole Meikle, sales agent with Engel & Völkers’ office in Newport Beach, sees both groups of investors becoming increasingly prominent in Orange County. She points to increasing demand for coastal properties from buyers in Europe, Asia and the Middle East, describing them as ‘collectors of homes [who] may already own on America’s east coast.’ Encouragingly, she also states that ‘the entry level sector is on fire, selling very fast with multiple offers’. This is clearly illustrated by the decrease in the average number of days properties spent on the market in Newport Beach last year – down 13% from 2011.
So, how much does it cost to enter the market in Newport Beach? The average price for a two bedroom house is currently around $500,000, while a three bedroom waterfront property will set you back somewhere between $1 million and $3 million. Prices decrease as you move inland, with a four or five bedroom family home in Upper Newport Bay – located on an estuary about fifteen minutes from the coastline – also trading in the $1 million to $3 million price bracket. Moving into the area’s prime properties, $10 million is roughly the starting price for a waterfront property with five rooms and a pool, while $19.5 million is the current price for a six-bedroom mansion in Upper Newport Bay. That’s far from the most expensive property around, however, as a five bedroom mansion on Laguna Beach is currently valued at the princely sum of $65 million.
With prices set to continue rising, there’s no time like the present to consider investing. A thriving rentals market is another incentive, with even relatively small properties bringing in around $2,500 a month. Factor in all the other obvious benefits of owning a property on the American west coast – namely sun, sea and sand – and Newport Beach’s resurgence looks set to continue for some time yet.
With over thirty years of international experience and offices situated locally, Engel & Völkers are perfectly placed to help you invest in property in Newport Beach. Follow Carole Meikle on Twitter for regular updates on this exclusive market.