The Ladera Issue

When I first found out that my neighborhoods to cover included Laguna Hills and Mission Viejo (one of which I call home), I had to make a decision:  to cover or not cover Ladera Ranch.

Many consider it a part of Mission Viejo, but the Ladera Ranch website indicates on their FAQ page that they are not a part of Mission Viejo.   As I went back and forth, I decided to not cover it because it has it’s own unique set of circumstances that differentiate it from the rest of Mission Viejo.  But, for those of my readers who live there, and after reading another blog about it today, I thought I’d toss Ladera a line.

The South OC Real Estate Tracker Blog provided a bit of info about Ladera and the sales there today.  It’s funny because the issues the blog addresses are things my husband and I discussed just the other night.

What’s been happening in this young community?  Well, about the same thing that’s happening everywhere else.

I pulled the median price charts from Altos Research for both Ladera (to the left) and Mission Viejo (to the right) so you could compare the two.

The median home value in Ladera Ranch is currently about $1,118,189 and in Mission Viejo it’s about $685,338.  Why the disparity?  Well, Ladera’s homes are all less than ten years old so they values are going to be inherently higher, and then there’s Covenant Hills.   This gated part of Ladera Ranch single handedly skews the numbers we would compare on a regular basis.  

As far as inventory goes, there are also about 213 properties on the market, compared to Mission Viejo’s 384.  This is disproportionately high because according to McCormack’s Guides in 2006 Ladera Ranch had about 8,000 housing units and Mission Viejo had about 33,714 housing units (all housing single family, condos, etc.).   

Covenant Hills homes are an entire gated community ranging in price from around $3-5 million dollars.  There is nothing comparable in scale or size in Mission Viejo that would raise the average value of the homes up near as much.  Since we’re seeing the higher end of the market seems to be more padded from this recent slump in prices than the rest of the market, this has helped pad the median price and skewed the general numbers from seeing such a fall.  But look at the losses sellers (previously linked, but found here)  outside of Covenant Hills are taking and you can see that they are still being hit by the tough market, and many are taking a harder hit than in Mission Viejo and other surrounding communities.

What’s the biggest problem for Ladera sellers right now?  Most of them bought in at the highest point of the real estate markets and so just about everyone is selling at a loss right now.  Whereas in Mission Viejo, sellers might not be selling for as much profit as a few years ago, but many have lived there long enough to still be turning a profit.

This community has some great selling points – it’s very family friendly and everything is new (schools, houses, pools, parks, stores, etc.).  But that is if you can get past spending 25 minutes on Crown Valley going the 3 miles from I-5 to Marguerite.  Additionally, you quickly find that the strict code enforcementf to create the universal ”look” of Ladera leaves things looking so alike it can make things pretty confusing.  I have spent much time lost in Ladera finding out that I needed to go to the other park with the same awning and really cool swings.  

One of the biggest threats to sellers are the high HOA’s (they claim to average about $150 on their website, but when we were house hunting there I found much higher rates, more like $300+ a month) and Mello Roos to boot.  As a potential buyer there, my husband and I found we could get about 400-500 more Sq Ft (in a condo, so it was proportionately a lot more room) for much less money per month elsewhere.

And there’s bad news on the horizon for sellers.  Ladera’s pristine setting is threatened.  Everything in the community is meticulously manicured (to the point where there is very little natural landscape left, it’s all been replanted) and now SDG&E is looking at putting in a Peaker Power Plant.  So much for perfection, huh?  One thing the residents might want to consider is that the peaker plants are constructed based on usage.  While I too would be lobbying to move that sucker, I’d also be taking a really proactive step to get my community to go green and conserve, conserve, conserve!

Ladera has a lot to offer, but these days things aren’t looking so good.  The circumstances and the market factors make this a tough place to be selling right now.  Hopefully the future will help Ladera out – the peaker plant issue might get resolved, Crown Valley construction might finally end and market factors might balance out.  It’s an awful lot of mights, but we’re all holding on to lots of mights right now!