You will find the best of both worlds in this white water ocean view cottage, located in the highly desirable area of Woods Cove. This charming cottage offers sparkling ocean views with the convenience of living near the beach, shops and restaurants. Perfectly situation on an elevated corner lot just blocks from the beach, this wonderfully maintained cottage offers ocean views of Emerald Bay and the north coast of Laguna Beach. Featured in this cozy beach cottage are 2 bedrooms, hardwood floors throughout, updated windows, fireplace, master bedroom sliding glass door to patio, and a wrap around fenced patio and yard that provides a wonderful spot to entertain and watch the sunsets. Mature landscape and foliage compliment the vibrant yard. In addition to the finished garage, there is a very large storage area with a concrete floor located under the home and accessible via the garage. Don’t hesitate as this classic Laguna Beach cottage won’t last long.

Directions: PCH to Ruby. Go two blocks to corner of Ruby and Catalina.

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
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8 are in Laguna Canyon – Client Brief Report + Photos
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22 are in Laguna Village (includes Arch Beach Heights and Top of the World) – Client Brief Report + Photos
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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
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11 are short sales – Client Brief Report + Photos
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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:

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.

Homes selling for over $1m typically require jumbo loans (or cash) versus the conforming loans.

What is the difference?

First the Shift of Sales to Higher Priced Homes

• October sales remain at a strong pace with 23 homes closing so far and 29 going into escrow.
• The dynamic part of the sales activity is the significant shift to higher end properties.
• This month, 8 of the closed sales were between $1m and $2m and 9 were over $2m (which is double the average of 3 or 4 sales for 2011)
• Also this month, 17 of the homes that went into escrow were between $1m to $2m, and 7 were over $2m.
• It’s a big shift that seems to be taking hold.
• Oct. Sales: Client Short Page

Conforming vs. Jumbo Rates

Basically, mortgage loans are categorized into three groups which determine interest rates: Conforming, Super-Conforming and Non-Conforming or Jumbo. Read on for more detail………

Conforming Loans:

The rates that you see published by the media always pertaining to “conforming” loans. These are loans that meet the criteria set forth by the two Government-owned agencies known as Fannie Mae and Freddie Mac plus HUD which oversees FHA loans. These rates always pertain to loan amounts of $417,000 or less. Loans sold to these agencies by all lenders account for 99% of all mortgage financing in the U.S. today. They are called “Conforming” loans because they conform to the guidelines established by these governmental agencies.

Interest rates for Conforming loans are determined by the supply and demand for Mortgage-Backed Securities (MBS’s) which are traded in the financial markets all day long just like stocks and bonds. Therefore, the rates for these types of mortgages change every day and throughout the day. Neither the Fed nor Lenders set these rates.

Super-Conforming Loans or High Balance Conforming Loans:

These are loans also governed by Fannie Mae, Freddie Mac and HUD but they allow larger loans in certain designated “High-Cost” markets. The limit in Orange and Los Angeles Counties is $625,500 – recently reduced from $729,750. Interest rates for these loans work in the same manner as rates for the smaller conforming loans described above with the exception that loans between $417,000 and $625,500 are always about .25% higher in rate than loans of $417,000 or less. Again, the rates are changing all the time and are not set by the Fed or by individual lenders.

Non-Conforming or Jumbo Loans:

This category describes loan amounts above $625,500 that are not saleable to Fannie Mae or Freddie Mac. Accordingly, there are far fewer lenders offering true jumbo loans. In general, the underwriting criteria and guidelines are stricter than they are for Fannie Mae/Freddie Mac and each lender is free to set their own rates and terms. However, in order to remain competitive I don’t see much variation between all of the lenders offering this type of financing. Interest rates are typically about .75% higher than they are for the loan amounts of $417,000 or less. Lenders usually adjust these rates daily also.

How to Finance More Than the Conforming Limit and Still Get the Low Rate:

Suppose you need to finance $800,000 yet you want the Super-Conforming Rate? Sometimes we can use what we call a “Piggy-Back” loan where we make a first mortgage for say $625,000 and simultaneously close a Home Equity Line of Credit (HELOC) for the rest – in this example $174,500.

Extension of Loan Limits of $729,750 Dead for Now

Despite efforts by Realtor and Mortgage trade organizations to fight for an extension of Fannie Mae, Freddie Mac, and FHA conforming loan limits, Congress failed to extend the $729,750 loan limits and allowed them to expire Sept. 30.  This means the maximum loan amount that Fannie, Freddie, and FHA will buy or guarantee is $625,500, and anything above that amount will be non-conforming requiring a jumbo loan.  As explained earlier, these loans typically carry a higher mortgage interest rate and require a higher down payment and therefore a higher monthly payment.

Our Government had a perfect opportunity to help homeowners and buyers by extending the loan limits. It just makes no sense to me that they would ignore something that could help so many people and do it without adding to our national debt. The California Association of Realtors estimated that this would affect as many as 30,000 potential home sales in California.

Mortgage Rates This Week:

What a difference a week makes. It was only a week ago that the media jumped all over the Freddie Mac report that rates had hit the lowest point ever in the preceding week. Unfortunately, those lowest rates only lasted about a day. We’ve had a steady stream of small increases in Mortgage pricing ever since thanks to last Fridays stronger than expected Employment Report, improvement in the Greek and European Debt crisis and a rising stock market. Today we are getting a little bit of relief in part to an oversold bond market, a good response to today’s auction of 30-year Treasury securities and PIMCO’s announcement yesterday that they are buying more Mortgage-Backed Securities. PIMCO is the world’s largest bond trader.

You can always visit the “Daily Mortgage Lock Advisory” on Rick Cerreli for current news about mortgage rates. Just click here: http://www.rtcmortgage.com/DailyRateLockAdvisory

• The number of homes for sale less than a million has shrunken to 60 homes from over 100 not to long ago and it’s resulted in less sales overall since the lower end had the most sales.
• Most of the activity is now in the $1m to $2m range. You can get loans and a deal on a house that was previously over $2m
• The over $2m market is still anemic with only 3 homes selling out of the 136 homes for  sale

Closed Sales

• 22 properties have closed which is less than the 26 homes sold average
• 6 were below $1m – Avg. price per sqft. low $600s, Avg 100 days on market
• 13 were between $1m to $2m – Avg. price per sq.ft. $600, avg 117 days on market, sold price vs. original list price 88%
• 3 were over $2m – 1 in Emerald Bay, 1 in 3 Arch, 1 in Victoria Beach
• 1 closed sale is a foreclosure, and 3 were short sales

Closed Sales

Client Short

Page
CMA Page


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Homes Going into Escrow

• 25 homes went into escrow thus far which is off the pace of the record high of 40 last month
• 4 were less than $1m, 7 were between $1m and $2m, and 8 are above $2m

Laguna Homes for Sale

• The number of listings ‘for sale’ has decreased to 309 properties.
• 60 are less than a $1m – 39 are single family residences, 21 are condos. There was over a 100 not to long ago.
• 136 properties for sale are over $2m
• 8% of homes for sale are distressed properties, which is low compared to OC 35%
• There are 8 properties for sale in foreclosure which is consistent.
• There are 23 short sale listings, which is trending down.

Price Decreases

• 67 properties (21%) had price decreases month to date which is consistent.

Yesterday 30 year mortgages had one of its best days in over a year. The Fed at one of their pre-scheduled FOMC meetings did what markets were expecting, plus more. The view prior to the FOMC policy statement at 2:22 yesterday was that the Fed would institute “Operation Twist” as it has been dubbed, selling shorter dated notes and replacing them with longer term notes and bonds to drive down long-term rates. The amount of shifting was expected to be about $300B, the Fed said it will be $400B. The Fed however surprised markets with the announcement it would turn back to buying Mortgage-Backed Securities (MBS’s) with principle pay downs on MBSs it now holds and instead of investing back into treasuries as it had been doing, investing in more MBSs. The reaction was swift in the mortgage market as MBSs soared in price and interest rates dropped.

The possibility of default by Greece and concern of an international recession have also helped to drive down rates this week in the MBS markets.

The Pre-Approval process is one of the most important but often neglected parts of the home buying process. A pre-approval should always be obtained before a buyer even begins to shop for a home, no matter how well-qualified he or she thinks they are. Today’s mortgage qualification guidelines are full of potential traps that can prevent even a seemingly well-qualified buyer from being approved. A qualified mortgage expert can help a buyer in many ways if the pre-approval process is started early.

Pre-Approval vs. Pre-Qualification

First, let’s define the difference between a Pre-Qualification and a Pre-Approval

Pre-Qualification

A mortgage loan pre-qualification is simply an estimate of how much house you can afford and how much money a lender would be willing to loan you. This usually involves verbally providing information on your income, assets, debts, and a potential down payment amount to a lender. That lender would then provide you with an estimate of how much you could afford to pay for a monthly mortgage. There is no cost or commitment on either side. This estimate is just helpful in helping you figure out if buying a home is a viable option, and if so, what your price range would probably be. But, the lender did not verify your credit, income or assets, and it may not be worth the piece of paper that it is written on.

Pre-Approval

Getting pre-approved means that you have a tentative commitment from a specific lender for mortgage funding. In this case, you provide a qualified lender with actual documentation of your income, assets, and debts. This process requires an application and a credit report. Your loan application with credit information should be input into the Fannie Mae/Freddie Mac automated underwriting System to obtain an Approval. These Approvals are accepted by all lenders. If there is any doubt about your qualifications, the lender should also review it with an underwriter.

Once pre-approved, the lender will issue a letter of commitment, stating how much money they are able to lend for a home purchase. With a pre-approval in hand you can start your shopping. Real estate agents and sellers will take you much more seriously when they see you have your mortgage funding in place.

It is important to understand, however, that even a pre-approval is still not a guarantee that you will be approved for a mortgage loan.  The funding will only be given when the property appraisal, title search, and other verifications check out on the home you have chosen to buy.

The pre-approval only takes a day or two once you provide the income and asset documentation.

What You Need for Pre-approval:

• Most recent paystubs covering a 30-day period
• W-2s for the two previous years
• If self-employed, personal and business tax returns from the last two years
• Two months of bank statements for each Bank, Investment & Retirement account
• Loan documents on your current home (if applicable)

Benefits of Pre-Approval:

• Allows time to improve credit scores and structure your financing to obtain a better rate. Sometimes just 1-point in your credit score can affect the rate or even disqualify a buyer
• Strengthens your offer – particularly helpful when there are multiple offers
• Sellers will be more likely to immediately accept your offer, because you are giving the seller peace of mind that their home is sold and it’s OK to take their home off the market
• Enjoy a Faster Closing Period – The lender can speed up the entire processing procedure. Appraisals can be ordered immediately. The process that typically takes about 30-days can be shortened to just two or three weeks, which comes in handy if a seller needs to quickly move and can’t decide which offer to accept
• Saves everyone time – the Buyer, Seller, Realtor and Mortgage Lender

As you can see, a pre-approved buyer has the advantage when shopping for a home. Just make sure that you are being pre-approved by a knowledgeable, reputable mortgage professional that has taken the time to review your documentation, run your credit and provide advice to structure your financing with the best possible terms for you.

• 20 properties have closed (11 were below $1m, 4 were between $1m to $2m, 5 were over $2m)
• Client Short Page
• CMA Page
• 11 properties were less than a $1m, 5 properties were condos
• Average time sfr were on market – 139 days
• The sold price was 93% of the last asking price
• No closed sales were foreclosures, and 7 were short sales Client Short Page
• 40 homes went into escrow this month – a year high
• 20 were less than $1m, 10 were between $1m and $2m, and 10 are above $2m
• The number of listings ‘for sale’ has leveled at 325 properties. 152 are over $2m.
• 8% of homes for sale are distressed properties, which is low compared to OC 35%
• There are 7 properties in foreclosure for sale. Client Short Page
• There are 19 short sale listings, which is trending down. Client Short Page
• 79 properties had price decreases month to date, which has been the average since March ‘11