Tag Archives: san clemente

Mortgage rate projections for 2017

According to the Orange County Register,  median home prices eclipsed $935,000 at the end of 2016, which begs the question, “Is now a good time to buy?”

Home for sale in Dana Point. Click photo for details.

Of course, there are so many factors that will ultimately have an impact on the decision to buy now or hold out for better market conditions.  I would suggest that mortgage interest rates play an important factor in that decision.

In late 2016, mortgage interest rates on a 30-year fixed loan bottomed out at 3.46% according to Bankrate.com.  A home with a purchase price of $500,000 @ 3.46% would equate to a $1,787.26 monthly mortgage payment.  Today, that same $500,000 house equates to a $1,991.25 monthly payment at 4.35%, which represents a 12% increase in your monthly mortgage expenses.

The Mortgage Bankers Association predicts that the 30-year fixed-rate mortgage will rise gradually over 2017, averaging 4.7% in the fourth quarter. The National Association of Realtors expects the 30-year fixed to be around 4.6 percent at the end of this year. This means that the same $500,000 home purchased at the end of this year may cost around $2,074.55 a month.

Look at it a different way: A buyer that pulled the trigger on a home purchase in late 2016 could have afforded a home valued at $580,000 ($2,073.22/mo @ 3.46%) versus only a $500,000 home if that buyer had waited until the end of 2017 ($2,074.55/mo @ 4.7%).  That $80,000 of buying power lost could represent an extra bedroom, that 3-car garage you always wanted, or a variety of other things.

If Orange County real estate prices rise 1% in 2017, a home you’re interested in now that has a sell price of $500,000 might be $505,000 at the end of the year.  That change in value is negligible compared to the forecasted rise in interest rates, at least as far as your monthly payment is concerned. As mentioned above, there are so many things to consider when purchasing a home and I would never tell anyone to run out and buy a house just because mortgage rates are still pretty low. However, it might be something to consider!

123 Via Murcia

This week’s property is in the new Sea Summit development. I’ve featured homes in this development before. In 10 years, I think the buyers of these homes will look back and think about how lucky they were to get such a great location and view for under $1M.

123 Via Murcia
3 bed, 3 bath
2,278 square feet total

Here’s why I think this is a great buy:

  • You get the peace of mind of new construction
  • Quiet, family-oriented community with parks and walking trails
  • Great access to the freeway
  • The HOA dues are reasonable ($250/month)

Want to check it out? Contact me today.

A property with a catch: Why zoning laws matter

Property: 607 Calle Canasta, San Clemente 92673
Status: Off market; listed in June 2016 for $1,298,000

This property COULD be a tremendous opportunity for the savvy investor, but it comes with a catch so I thought it would be good to take a look.

On its face, it seems like this 5-unit complex is priced competitively enough so that there’s a little meat on the bone for an investor to earn some income right out of the gate:

$1,298,000 with 20% down brings your mortgage payment to just around $5,000/mo. If pro forma rents hold up and you can in fact earn over $5,600/mo, you might think it’s worth looking into further.  However, also included in the notes of this listing:

“Since 5th unit is non-conforming, lenders will require loan to be commercial paper. Building is zoned a four-plex, however large front unit was converted to (2) un-permitted units.”

A non-conforming use issue can quickly turn a great deal into a nightmare for the uneducated investor. Most jurisdictions in the United States have some form of zoning regulations in place. Certain zones may only permit single-family dwellings and thus forbid apartments and commercial uses.

In the aforementioned example, a 4-unit complex was converted to a 5-unit complex without properly permitting, probably because the property is located in a zone that prohibits such use. Therefore, this property is “nonconforming” to modern day building and zoning codes. In some cases, a property can be designated as “legal” nonconforming if its configuration and use was legal at one time and pre-dated the zoning laws.

There are plenty of non-conforming properties out there and the practice of changing the configuration and use of a property is not uncommon, but it’s important to know the potential hazards of investing.  For example, if a neighbor files a complaint with the City about an illegally functioning 5-unit complex across the street, the City may force you to convert the property back to how it was originally permitted. You may have issues with insuring a nonconforming property.  You may run into liability issues with future tenants.

It’s also worth noting that the seller’s agent believes any buyer requiring financing will have to resort to “commercial paper,” which typically means harsher terms, higher interest rates and much shorter timeframes to pay back a loan.  All things to consider when considering a non-conforming property.

Questions to ask:

Is this “legal” non-conforming or “illegal” non-conforming?

How many utility meters are there?

How many units is the City building department monitoring for the property?

Have all 5 units been occupied continuously for the past year?

If you have questions about a property you’re interested in buying or selling, contact me.

214 Via Robina #12: For Lease!

This week’s listing is a great rental in San Clemente.

214 Via Robina #12
2 bed, 2 bath
1,016 square feet

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Here’s why I think this is a great place to rent:

  • Ocean views
  • Walking distance to downtown San Clemente shops and restaurants
  • Walking distance to the San Clemente Pier and some of the most famous beaches in California
  • Nicely remodeled with new hardwood flooring and carpeting, an updated kitchen, and remodeled bathrooms
  • Dedicated carport and a large one-car detached garage (great for this area, where parking is often challenging)
  • In-unit washer and dryer
  • Trash, water, and sewer are included
  • Dogs up to 20 lbs are permitted
    Want to check it out? Contact me today.

218 Avenida Santa Barbara

This is a great beach house, close to all the action in San Clemente!

218 Avenida Santa Barbara
3 bed, 2 bath
1,331 square feet

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Here’s why I think this is a great buy:

  • Walking distance to T-Street Beach, San Clemente Pier, and downtown Del Mar Street
  • Completely remodeled—no work necessary
  • Great backyard for entertaining
  • Highly-rated schools: Clarence Lobo Elementary is an 8, Shorecliffs Middle School is an 8, and San Clemente High is a 9

Want to check it out? Contact me today.

3 Vista Encanta

Great townhouse overlooking the Pacific in San Clemente!

3 Vista Encanta
3 bed, 2.5 bath
2,100 square feet

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Here’s why I think this is a great buy:

  • It’s completely remodeled, including reclaimed barn wood flooring, new doors, triple-paned Milgard windows, recessed LED lighting, and updated kitchen and baths
  • This is the largest unit in the Seaview Townhomes complex
  • They’ve added central air conditioning, and the furnace and condenser are also brand new
  • Great ocean view
  • Walking distance to downtown San Clemente and just a few miles from the pier/beach
  • The community has a newly resurfaced pool, spa, sport court, and dog park
  • You can’t beat the price ($350/square foot) for a prime location like this

Want to check it out? Contact me today.


106 W Paseo De Cristobal

Yes, this one’s a fixer, but it has great investment potential.

106 W Paseo De Cristobal
5 bed, 2.5 bath
2,172 square feet

fixer 1

fixer 2

Here’s why I think this is a great buy:

  • The home is in a great area, on the coveted ocean side of the freeway
  • There is a lot of space, especially considering the house was built in 1958
  • With renovation, a buyer could turn a significant profit when reselling (in the near future, or in years to come)

Want to check it out? Contact me today.