In a bit of an off-the-wall post on the L.A. Times’ blog L.A. Land, we see that even homeowners in the illustrious Newport Beach are being rocked by the real estate market. I usually blog about Orange, Santa Ana, and Tustin. Each week I read stories of housing heartbreak and heartache in these cities. Santa Ana tops the list in Orange County for the most foreclosures. Rarely do I hear of tales of despair coming from Newport Beach… but here’s an example of how prices really have fallen in even the upscale beach cities.
The former CEO for Broadcom Henry Nicholas was indicted on securities fraud, conspiracy, and federal narcotics charges last Thursday in Santa Ana. The whole thing is just begging for a TV movie or an E! True Hollywood Story, especially the whole orgi parties, prostitutes, and drugs part (check out the whole indictment here).
Anyway, according to the L.A. Times E. Scott Reckard’s post “Hard times in Newport Beach“, in discussing bail terms with Nicholas, current home values were presented. While the judge noted that Nicholas is “obviously one of the wealthiest individuals in the world,” it was also apparent that Nicholas has taken some recent hits with his Newport Beach home:
Nicholas paid $19.5 million for the Grays’ estate in November 2006, property records show. It now may be worth as little as $15 million, Craig [Nicholas' defense lawyer] said –- a decline of 23% from what Nicholas paid.
Here’s the part I love… the judge didn’t trust that Nicholas would mind losing a $15 million house that he had put up for bail (chump change for him). So, only what you’d expect out of some weird TV movie, the judge said his supporters had to put up their houses for his bail. As moms always do, Nicholas’ mom stood by his side and put up her Malibu estate, also on recent decline:
Principal among those was Nicholas’ mother, Marcella Nicholas Leach, who offered a home in Malibu where Nicholas grew up. She estimated the house had once been worth as much as $3 million, although the attorneys told Nakazato its current value was about $2.1 million.
“Maybe we should make it $2 million,” Nakazato said. “We all know how real estate has fluctuated in California.”
So, why stories of heartache in Newport Beach real estate few and far between? Well, the obvious answer is that there was little-to-none sub-prime lending happening in Newport Beach… and those living there plan to stay in their homes for awhile and are more “settled.” Still, it’s just nice for us regular folk to know that even the equity of the affluent is on the same downward spiral as with the rest of the County.