Balboa Island homes rival country’s priciest

Alicia Robinson

Moving to Balboa Island will cost you at least a million bucks these

days, and you’re not likely to get by more cheaply on the Balboa

Peninsula.

The island’s 92662 ZIP Code had the second-highest number of

million-dollar home sales in the country between July 2003 and June

2004, according to data from New York-based OnBoard LLC.

The real estate information company collects data reflecting sales

transactions in 800 metropolitan areas around the U.S., said Pete

Goldey at OnBoard LLC.

Sales data showed that 96% of homes sold in the island ZIP Code in

the one-year period cost at least $1 million. Three other Newport

Beach ZIP Codes also made the list’s top 30 -- notably the peninsula,

ringing in at No. 6 with 74% of sales topping $1 million.

Corona del Mar’s 92625 ZIP Code was No. 11 and the 92657 ZIP Code

in Newport Coast ranked No. 13.

“I think it’s something to be very proud of,” Newport Beach Mayor

Steve Bromberg said. “Newport Beach is an affluent community, and

it’s a very intelligent community.... The people who come to this

city have worked extremely hard to get what they have, and this is

where they’ve found what they think is the good life.”

A few key factors are creating the prices.

The obvious one is being near or on the water, said G. Christopher

Davis, director of the real estate management program at UC Irvine’s

Graduate School of Management.

“With Newport Coast, which is not on the water, it’s the size of

home and view,” he said. “Those homes are big up there.”

And they’re new, which is another draw. When homes first went up

in Newport Coast, some people shied away because they didn’t want to

pay the taxes added by Mello-Roos, a special tax voters must approve

that funds police, schools, roads or other public amenities, said

Kent McNaughton, a Newport Beach agent for First Team Real Estate.

“Now that Newport Coast is almost 100% built out, nobody cares

about the Mello-Roos because they want to be in the new area,” he

said.

Recent figures from the California Assn. of Realtors listed

Newport Beach as having a median home price of $1.05 million in

November 2004, the seventh-highest statewide. In Orange County, the

median price last month was $633,340, an increase of more than 20%

from November 2003.

Area housing prices rose steadily in 2004, but it’s not a bubble

that’s going to burst in 2005 because demand is still outstripping

supply, Davis said.

“I think that you’ll see it constantly rising in price,”

McNaughton said. “I predict a minimum of a 5% increase every year in

Newport Beach In my opinion, Newport Beach [housing] is still

underpriced.”

So what does $1 million buy these days in Newport real estate?

“You get a condo in Corona del Mar, that’s what you get for a

million bucks,” McNaughton said.

For $1.5 million to $2 million, he said, a buyer can get a small

to midsized single-family detached house in the “less desirable”

areas of Newport Beach.

Some homes on Lido Isle and Balboa -- both the island and the

peninsula -- can still be had for $1 million, but first-time buyers

are likely to be priced out of the market in Newport Coast, Davis

said.

“Most of the people who are buying these homes, it is because a

previous home has increased so much in value that they can afford to

move up,” he said.

The number of eight-figure sales has increased significantly in

the past few years, with 10 properties in the area going for at

least $10 million in 2004, said Steve High, president of Strada

Properties in Newport Beach.

“That has become the new benchmark in price as far as getting a

luxury home in our area,” he said.

People want to live here because the city has amenities, such as

the largest pleasure yacht harbor in the country and great services,

Bromberg said, but the bottom-line cost may be way over the heads of

some city employees.

“Quite frankly, a lot of them cannot afford to live in Newport

Beach,” he said.