How much house, or how little, does $1 million buy in Orange County?
Paul Crane stood in the bedroom doorway of a home for lease one block from the ocean on Newport Beach’s Balboa Peninsula.
The bedroom could easily fit inside a typical walk-in closet in this city. But the residence itself is only 534 square feet.
“What we would consider a bedroom is maybe not what they considered a bedroom when (the home) was built,” said Crane, consultant to a group of investors that recently bought the 1930s-era property, which has another tiny unit above the garage.
The price: $1 million.
Twenty six miles inland, that $1 million could fetch something relatively huge: A “highly upgraded,” 2,800-square-foot, five-bedroom home on half an acre in Fullerton, according to the listing, with a swimming pool and spa – plus a private tennis court.
How much house you can get for $1 million in sprawling Orange County and the surrounding region depends largely on where you look.
A dozen cities here have average list prices of $1 million and higher, according to ReportsOnHousing.com, which pegs the average asking price for a house in the county at $1.2 million.
In some neighborhoods, however, $1 million is barely enough.
“My clients are often disappointed after our first outing when they see what $1 million will get them today,” said Rob Magnotta, a real estate agent at First Team Real Estate in Newport Beach. “Even though we’ve discussed it and looked at it on paper, seeing it in person can be disheartening.”
The sticker shock is especially tough on out-of-towners.
While 5 percent of homes around the nation listed on housing website Trulia are priced at $1 million or more, 24 percent of Orange County’s residential listings fit that category, said Jed Kolko, Trulia’s chief economist.
And, he said, “In Orange County, $1 million buys you less.”
The median size of homes priced at about $1 million in Orange County is 2,700 square feet, Kolko said. Nationally, homes priced at that amount are typically 3,500 square feet.
“For the large majority of buyers, even in relatively high-priced areas like Orange County, owning a $1 million home remains very much an aspiration,” said Svenja Gudell, director of economic research at online hometracker Zillow.
Still, plenty of people manage to come up with the money.
With the housing market continuing to rebound, demand for homes valued at upwards of $1 million is surging. Sales of Orange County homes in that price range shot up 52 percent in 2013, DataQuick Information Systems reported in January.
Last year, 376 homes sold for $1 million and up in the upper Newport Bay-Fashion Island area, which had the most seven-digit sales in the county, according to DataQuick. It was the fourth highest total for a California ZIP code. In Laguna Beach, 374 million-dollar-plus homes sold in the $1 million-plus range.
The way $1 million stretches and shrinks between low-cost and luxury can be seen throughout southern California.
A recent check of the multiple listing service in Malibu – where an 11,413-square-foot, oceanfront home designed by renowned architect Frank Gehry has a $57.5 million price tag – showed the majority of listings are far north of $1 million. Only a dozen out of 133 homes were going for less than seven digits.
In Corona, just over the border from Orange County in Riverside County, 10 homes were listed in the $1 million range, out of 240 residences. Three reached $2 million and change.
“All you need to do is cross the Orange County line (into Riverside) and a million dollars will put you in a luxury class,” said Dan Slater, owner of Orange Realty.
San Bernardino showed no houses for sale above $950,000, and just two for exactly that price.
One of them, on aptly named Ponderosa Drive, is a 7,507-square-foot custom home with a swimming pool behind gates on a secluded 1.6-acre, spread in the foothills, with a 180-degree view of the valley.
Real estate agents in Orange County – where an oceanfront Laguna Beach house last year sold for $33 million – said in many local cities, $1 million is considered move-up territory.
“The million dollar market seems to be one of our strongest markets right now,” said Tim Carr of Villa Real Estate. He said a small home he represented on Costa Mesa’s east side for $850,000 recently attracted multiple offers and sold over asking price.
“There is strong demand in this price range, as this is really the local ‘entry level’ pricing for a decent home adjacent to Newport Beach.”
The county had 165 homes for sale between $950,000 and $1.05 million last week, said real estate broker Christine Donovan of DonovanBlatt Realty in Costa Mesa.
“There is less than 3 months of inventory on the market, which means that the homes in this price range are considered to be in a seller’s market, with homes taking about 2.5 months to sell,” she said.
Most $1 million homes in Orange County are purchased by people who live in them. But the investors who bought the tiny 34th Street Newport Beach property – technically a duplex because of the two units — are leasing it briefly as they await final approval from the city to tear it down. They want to build a single family home in the style of a beach bungalow with Bali influences, said Paul Crane, the consultant.
“What they (the investors) are looking to do is revitalize some of these older communities,” he said.
It’s still too early, he said, to say what the new asking price will be.