Category Archives: Laguna Beach Real Estate

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697 Mystic Way Laguna Beach CA 92651

4 Interesting Facts About This Year’s Laguna Market

But first check out my new listing in Arch Beach Heights – Everything my buyers want – open floor plan, indoor-outdoor living, big views, lots of amenities. Not much on privacy but Laguna is the land of compromise. Something’s got to give. Let me know if you’re interested.

New Laguna Beach Real Estate Listing

4 interesting facts about the market in Jan. and Feb. 2012

  • 40% of January’s 20 closed sales were distressed properties (3 foreclosed, 5 short sales) and 65% were below a $1m (13) and 30% (6) were between $1m and $2m leaving 2 that went for $4m each.

That said, January was a good month for sales activity with the most closed sales for Jan. since 2006. 25 went into escrow, again with 65% less than $1m. The average price for closed sale was $1.3m which is down.

View the closed sales:
Client Short Page
CMA Page
Printable Map

  • February started with a bang with 25 homes going into escrow and its only Feb. 16th. All my colleagues, including myself, are seeing very active open houses. There are 14 closed sales which is in line with last years 28 home sale average per month.
  • Inventory is remaining low with 236 active listings which is about the 2006 level. Less than $1m – 53, $1m to $2m – 72, over $2m – 112, REO – 7, Short sale – 15
  • The ‘over the $2m’ market is still in a stall. 2 to 4 homes sell a month out of the 112 for sale (almost 50% of all inventories) It’s going to be an interesting part of the market this month with more jumbo loans coming on the market and price reductions.

The take away from all this is that the ‘less than a million’ market has a 3 month inventory of homes for sale, which is a healthy buyers/sellers market. For the most part, the ‘new to market sellers’ are pricing to sell, and the buyers are getting the deals they wanted. The average price per sqft is around $600 a sqft., 30% less than the height of the market and at a 2003 level.

The markets above $1m are still a buyer’s market. The $1m to $2m has about a 6 month inventory.

See the multi year comparison graph of inventories, pending sales, and closed sales below:

If you’re interested in a Laguna house for less than a million please check out this new foreclosure info and video.

This 3 bdm, 2.5 bath, 1,624 sq.ft. foreclosure is actually in pretty good shape and at a good price of $653,000 which is at a really low price per sqft of $402.  It could use some upgrading but it’s not totally beat like other foreclosures.

Client Full Report with Photo/Map

The following is one of my favorite less than $2m listing.

697 Mystic Way Laguna Beach CA 92651

It’s in popular Mystic Hills, 4 bdm/4 bth, 2,800 sq.ft. with huge views from every room and its attractively priced at $1,875m, which is $670 a sqft., making it the best deal in Mystic Hills. It has a pool, albeit not large, in the backyard.

Client Full Report with Photo/Map


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Are Underwriting Guidelines Too Strict? Or are Loan Originators Too Dumb?

It’s been estimated that an average one-third of all home sales fall out. Mortgages being declined or unreasonable conditions of approval are where most real estate agents and borrowers place the blame. Is that blame fairly placed or are the Loan Originators to blame for not knowing the guidelines of the loans for which they were hired to originate?  Read on for a different point of view…..

A few years ago when the mortgage and housing markets and the overall economy started to tumble, the underwriting guidelines were changing almost daily. Lenders couldn’t keep up with all the changes made by Fannie Mae, Freddie Mac and FHA – the three housing agencies that are now part of our federal government and account for more than 90% of all mortgage money. Loan Originators, Processors & Underwriters were trying to figure out what could be approved, what should be declined and how to properly document a loan file.

But more recently the guidelines have stabilized with relatively few changes in the past year or more. So, if the guidelines aren’t changing any more, shouldn’t we as loan originators be expected to know what can be approved and what shouldn’t? And shouldn’t we know what documentation is required to properly assemble a loan that will be approved when it reaches the underwriting department?

The mortgage process starts with the loan originator. And as the saying goes, “the buck stops here”. A good loan originator should know by the completion of a loan application and immediate review of the borrower’s income, assets and credit whether a loan can be approved. And he/she should also anticipate what documentation an underwriter will require to issue a loan approval without a list of conditions a mile long.

Why Do So Many Loan Applications Get Rejected?

In today’s mortgage climate where “no-doc” loans no longer exist, a loan originator should possess the following qualities:

  • Knowledge of underwriting guidelines
  • Expertise in knowing what documentation needs to go into a file and what doesn’t
  • Control of the file during the loan process

Knowledge and expertise come from experience. An experienced loan originator should know how to review and analyze the borrower’s tax returns, credit report, and other financial information. If the originator merely takes the application and hands it off to a processor never to look at it again, that loan has a lower probability of being approved. The necessary loan documentation should be gathered from the borrower within the first few days and analyzed upon receipt. If it is, then there’s no reason to be surprised by an underwriters request for more documentation and explanations later. A pro-active loan originator will have already identified the potential weaknesses in a file and addressed it long before it gets to the underwriter.

By keeping control of the file the loan originator can monitor the documentation as it is received. Constant review helps to identify a potential problem earlier in the process and allows time to request any additional documentation to overcome the issue. Larger companies that utilize centralized processing located in another part of the country (or in some cases in another country) lose the ability to monitor the file as it develops.

The loan originator in today’s mortgage market needs to be more than just an “order-taker”. Knowledge, understanding, expertise and control of the file will all serve to mitigate problems that will otherwise arise in a later stage of the loan process. Too many loan files that are declined could have been easily approved if only the loan officer had just taken the time to review the file upfront; scrutinized the documentation; and, identified and addressed the concerns with the borrowers, loan processor or underwriter.

Relying only on an experienced knowledgeable, professional and local loan originator will help to improve the likelihood of your loan closing.

Mortgage Rates This Week:

Rates held steady this week. The financial markets were calm but with a close eye on the progress (or lack thereof) of Greece and Europe to come to any kind of resolution to their debt problems. The most important report of the month is Friday morning when the Labor Department releases the Employment Report for the month of December. Without a doubt, Employment and Housing are the two most important components missing from our economic recovery. If actual numbers are far off from projections it could move the markets/interest rates.

For a day to day update on the factors influencing mortgage rates, be sure to read the Daily Rate Lock Advisory on my website:

Daily Rate Lock Advisory

Laguna Beach residents will enjoy watching this YouTube video about Laguna in the old days…..

Those Were The Days – Laguna Beach

Mortgage Interest Rates*
Rates as of Thursday, 2nd February, 2012:

Mortgage Interest Rates as of Thursday, 2nd February, 2012

 


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Free Dana Point Electronic Waste Recycling Drop off old TVs, Computers, Printers, Batteries, Shred Paper Files..

The eWaste drop-off (and paper shredding) Surterre Properties conducted last month was so popular I thought you all would like to hear about this weekend’s drop-off in Dana Point (a 15 minute drive).

Our average car count over the last couple of years has been around 250 through each event.   At last month’s pickup we had 408!  Sign of the times?

This is a great opportunity to get rid of your old TVs, computers, printers, batteries and shred your paper files..and to have them recycled. It is free and easy.

Surterre Properties Electronic Waste Recycling

Surterre has expanded with offices in Dana Point and San Clemente. We were the ‘king of the hill’ in Laguna this last year. Check out the numbers below.

Laguna Beach Real Estate for Sale


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A Snap Shot and Videos of Properties for Sale Under a Million in Laguna Beach

Before going into the detail of the properties under $1m, I’d like to put it in context of where the Laguna market ended up in 2011.

Year End Highlights: 32 sales in the month of December, the highest month for all of 2011; 90 sales in the 4th quarter, best quarter of 2011; only 228 Active Listings at the end of the year, the lowest number of Actives since December of 2007 (four years ago).

Secondly, it is pre spring, which is when the homes for sales usually sustainably increase.

Thirdly, a client shared with me the following graph on homes for sale under $1m for the last 10 years. Pretty interesting that from 2004 to 2007 there were hardly any properties for sale under a million. Spiked up to over a 100 in April 2011 and now is at 49 properties.

We need to keep an eye on what happens this spring, which starts next month.

There are currently 49 properties for sale for less than a $1 Million

That’s about a 3 month inventory based on 15 sales a month, which has been the average amount of sales in this price range.

34 are single family residences – Client Brief Report + Photos

15 are condos – Client Brief Report + Photos

Breakdown by areas of Laguna

10 are in South Laguna – Client Brief Report + Photos
Printable Map

10 are in North Laguna (8 are condos) – Client Brief Report + Photos
Printable Map

8 are in Laguna Canyon – Client Brief Report + Photos
Printable Map

22 are in Laguna Village (includes Arch Beach Heights and Top of the World) – Client Brief Report + Photos
Printable Map

Breakdown of Distressed Properties for less than a Million

53% of properties for less than $1m are distressed properties (short or foreclosed)

4 are foreclosures – Client Brief Report + Photos
Printable Map

11 are short sales – Client Brief Report + Photos
Printable Map

Spotlight on Two new ones that came on the market today (one $500k and the other $615k) – Client Brief Report + Photos

Videos of 2 properties for less than a million in the Oak Street Village Area – Sorry if they are a little hoj pod but that happens when you have to work around people that are in the residence. Better than nothing.

The year in Review in Graphs:


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Mortgage Rates Hit All Time Lows (Again)!

It’s all about rates this week as they have retreated back to their all-time low point that was also touched in September. Another strong Treasury auction and lack of any real solution to the European debt crisis helped, among other things.

While mortgage rates are not based on US Treasuries, the Mortgage-Backed-Securities (MBS) that do influence rates are similar to Treasuries and tend to trade in the same direction. Read on for a better understanding………….

Can Rates Go Any Lower?

A huge factor in how low mortgage rates can go is the underlying Mortgage-Backed-Securities (MBS) market.  Nearly all loan products offered by lenders are sold to Fannie Mae and Freddie Mac and end up as part of MBS pools or securities.  These MBS securities are then purchased by institutional investors.

In general, the lender that services the loan will receive .375% of the rate on a 30-year fixed rate loan. The ultimate investor in the MBS will receive the rest, except for the remaining .125% that gets eaten up by a variety of fees. So, on a 4% loan, the servicing lender gets 0.375% and the investor receives 3.5% as their rate of return.  Lenders can pool loans +/- .25 of the MBS rate. So, if the MBS security being sold into is at 4%, lenders can deliver loans with rates between 3.75% and 4.25% into that pool.

If rates go any lower, there will be a need to create a 3% MBS pool with a 3.5% interest rate. But, in order for lenders, Fannie and Freddie, to create MBS’s with a lower rate, there has to be investors willing to buy these MBS’s at a lower rate. With rates so low already, there likely isn’t much, if any, demand for lower rates on Mortgage-Backed Securities.

Therefore, the nature of supply and demand for Mortgage-Backed Securities will probably prevent rates from going lower. Unless economic factors force them down even more. And, any positive signs in the economy or in Europe can make rates pop back up again in no time.

The Fed

The Fed, officially known as the Federal Reserve, had one of their regularly scheduled Federal Open Market Committee meetings this week too. Although their comments were generally non-committal, Many observers believe the Fed will step in to take steps to stimulate growth in 2012, first through communications measures that drive home their expectation that interest rates will not rise for a long time, and then through more bond buying. Some have said the central bank should resume purchases of mortgage-backed securities to help revive the depressed housing market; others would prefer to stick with purchases of U.S. government debt, i.e., Treasury securities.

In the meantime, ‘tis the season…………

To track the factors that influence mortgage rates on any given day or week, you can always click on the following link to my Daily Rate Lock Advisory:

http://www.rtcmortgage.com/DailyRateLockAdvisory

Mortgage Interest Rates*
Rates as of Thursday, 15th December, 2011:


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What did the Laguna Foreclosed Beachfront go for?

Foreclosed Beach Front Property

Boy, things surely got steamed up last week with the Laguna foreclosed beach front property offer for $2 million. The video was seen by over 150 people and I got lots of calls of interest.

While the listing agent won’t give me the exact amount since it’s in escrow, he did tell me it was $3+ million, which is an awesome price.

A lessoned learned though is that most of the people who were interested did not have the loan approval letter that was required on the offer submission. Great opportunities happen fast and you need to have your powder dry and loaded, so get those pre-approvals.

Call Rick Cirelli at RTC Mortgage at 949-494-4701

I thought you’d get a kick out of this – Attached is a 1977 purchase agreement – 1 PAGE – that’s it. I especially like Paragraph #16 wherein it states that should the buyer default; the buyer’s deposit is given half to the agent and half to the seller

Click Here to View the 1977 Agreement

Interesting Quote – I get asked all the time ‘when is the real estate market going to turn around?’ and thought this quote from John Burns, a real estate consultant to builders, is as good as any. “With the general view that prices and mortgage rates are more likely to get better than worse, many buyers are staying on the sidelines. When they can say, “We should have bought 6 months ago,” we expect the pent-up demand to begin to unleash”

In other words, many will see the bottom in the rear view mirror.


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Sign of the Times – Laguna Beach Oceanfront Foreclosure for Less than $2 Million

Many buyers have been waiting for this.

A relatively affordable ‘on the beach’ oceanfront home for less than $2 million.

Client Brief Report + Photos

It’s got some serious neighbors


Offers must be in by Dec. 11 and the seller will let you know the highest offer and everyone can make a ‘best and final’ offer.

The next least expensive sfr is $3.5 million.

Check out the 28 Laguna homes for sale on the oceanfront. Client Brief Report + PhotosPrintable Map

Click here to see the 13 Laguna oceanfront condos – Client Brief Report + Photos