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Rancho Ortega Blog discusses matters of public interest in South Orange County, including the communities of San Juan Capistrano, Ladera Ranch and Rancho Mission Viejo.

The writings of Don Juan Ortega on the Rancho Ortega Blog are the personal views of the author. This blog is not authored by nor does it have any affiliation whatsoever with any other person, place or entity using the name "Rancho Ortega" (or any similar name).

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Real Estate Value Watch in Ladera Ranch

There is no denying that Ladera Ranch real estate values have skyrocketed since we called a bottom in Ladera Ranch home prices.  But are we really back to a point where a Covenant Hills custom home has appreciated a $1M profit in two years without any renovation?

Here’s the 2012 sale: $2,800,000 sales price.  Note the photos, square footage and description.

Here’s the 2014 offer: $3,999,999 asking price.  Note the photos, square footage and description — all virtually identical to the 2012 listing.

It’s a beautiful house and it may well be worth nearly $4M today.  After all, two of the five custom home sales that have closed during the last twelve months have recorded sales prices in excess of $3M.  It’s possible that the current sellers invested in the property, but the description doesn’t say so.  We doubt it needed any work.  We were familiar with this house when it sold in 2012: it was in very good condition.  We also don’t know the seller’s motivation for selling.  It’s very possible that they are not investors or flippers, they are selling for other reasons and their asking price may merely be an effort to reflect current market value.

Regardless of motive, it would be very noteworthy indeed if the value of high end custom homes has increased over 40% in the last two years.  That would be good news for Ladera Ranch homeowners, but we might need to think about calling a top in Ladera Ranch home prices.

2 comments to Real Estate Value Watch in Ladera Ranch

  • greg

    The lower priced housing has appreciated more than the high end market, at least in my personal situation. I bought a 2br, 2.5 bath condo in Ladera Ranch three years ago this month for $260k. I’ve been renting it for $2,100/mo since then, and similar comps are now selling for $415k. A 60% appreciation in three years is enough to make me (almost) forget about the capital gains I’ll face when selling.

  • Don Juan Ortega

    Capital gains, in real estate that’s a good problem to have.

    I’m not surprised that the normal range of housing has appreciated dramatically. In my opinion, Ladera Ranch was hit early and hard, and probably over corrected below fundamental values. Home prices seem to be back to normal, perhaps a little frothy. But if sellers can flip a $4M home for a $1M profit in two years, that interests me. Are we really back to that point? If so, you might consider selling soon and locking in those gains.