Median homes not for median buyer

Two median-income families in Orange County, with good credit and a

combined down payment of $200,000, couldn’t afford to buy one

median-priced home in Laguna Beach.

A median-priced home in Laguna’s 92651 ZIP code cost a little more

than $1 million in May, according to the latest figures released by

DataQuick Information Systems, which tracks sales and prices.

“This is the highest median ever in Laguna Beach,” said Bob

Chapman, general manager of Orange County for Prudential California

Realty. “But buyers and sellers need to know that you can have a rise

in the median price, but not experience a great deal of appreciation

in an individual part of the market.”

The median should not be confused with the average price. A

median-priced home has with as many priced above it as below, it is

the mid-point price of all the homes for sale in a specific market,

in this case, ZIP code 92651.

“Laguna’s median-priced home has always been out of range of the

median-income family,” Chapman said. “But Orange County homes have

always been expensive in comparison to other counties in California

and compared to the rest of the country.”

A low rate of unemployment and a diverse job market -- not to

mention the weather and the recreation and entertainment options make

the county a desirable place to live.

The most desirable place to live in the county is on the coast.

The highest medians, traditionally, are posted in Laguna Beach and

some parts of Newport Beach. The countywide median was $398,000 in

May compared to $1.06 million in Newport Beach’s 92657 ZIP code, a

16.8% increase over the previous year; $2.02 million in Newport

Beach’s 92661 ZIP code, a 14.6% increase; and Laguna’s 49.1%

increase.

Laguna’s 92651 ZIP code includes Emerald Bay, where the least

expensive homes are selling on the high side of $2 million, said

Wayne Baglin, a real estate broker and city councilman. It also

includes California Cove on El Toro Road, where homes sell for much

less. Sales at one end of the spectrum or the other show a marked

affect on the median.

“If five or six homes sell in California Cove in one month and not

any or not many in Emerald Bay, the median can go down to $800,000,”

Baglin said. “It can jump around from $800,000 to $1 million and back

to $900,000 in different months.

“What the median gives you is a rough indicator, not an accurate

indicator. But it does tell you that real estate is expensive here.”

Historically speaking, home buyers would approach a $1 million

purchase prepared to put down 20% and seek a 30-year, fixed-interest

rate loan, said Mark Simon, senior loan consultant for First Capital

Mortgage.

The Laguna Beach median home with $200,000 down and a 5.5% loan

would cost $4,760 a month, principal and interest only. A buyer would

need an income of $15,500 a month to qualify. That would include an

allowance for property taxes and insurance, Simon said.

“But lenders in today’s market have other ways to finance a

purchase.” Simon said. “And in today’s low interest rate environment

buyers are able to buy more house than ever before.”

A home buyer comfortable with a $4,800-a-month payment would have

been able to buy an $800,000 home, depending on down payment and

credit rating, at last year’s interest rates, Chapman said. That same

payment might put the buyer into a $925,000 house this year.

Buyers who plan to move within five years, expect to enlarge their

families, become empty nesters or are looking for appreciation to

help them move up might be more interested in a five-year,

interest-only loan with a lower down payment and lower monthly

payment, Simon said.

There are 229 homes on the local market, up a tad from the 221

homes on the market at the same time last year, the highest priced at

$15 million.

About the cheapest entry-level, single-family home in Laguna Beach

will cost $500,000, Chapman said.

Condos are the best way to get a toehold in Laguna’s real estate

market. Some -- not many -- are priced as low as $300,000, Chapman

said.

“The median income family could probably buy that,” Simon said.

City to set off annual Fourth fireworks

The city of Laguna Beach will sponsor its annual fireworks display

at 9 p.m. on the Fourth of July at Monument Point in Heisler Park.

The area around Monument Point, including the beach below, will be

closed all day to ensure public safety.

The Fire Department reminds residents and tourists who no

fireworks of any kind are allowed in Laguna, and that no fires or

portable cooking devices are allowed on the beach or in any parks.

Tents and canopies are also prohibited.

City officials advise attendees to allow ample time to find

parking and to commute because of traffic congestion. The city’s

trolley system will stop at 6:30 p.m. to help ease congestion.

De St. Paer named to HIV Advisory Committee

The Laguna Beach Community Clinic announced the election of Kim de

St. Paer as chair of the Laguna Beach HIV Advisory Committee.

De St. Paer has served as co-chair for two years and has performed

HIV education and anonymous testing at the clinic for more than a

decade.

“I look forward to another exciting year in this field,” de St.

Paer said. “With Phil Aragon as my vice chairperson, I know we will

continue our mission of advice to the council and education in the

community.”

In the last year, the committee has provided educational materials

for local bars, dedicated the AIDS memorial bench overlooking the

beach on Mountain Street, participated in World AIDS Day events,

funded services to HIV-infected residents and collaborated with high

school students in producing posters and pamphlets aimed at young

residents.

Main Beach water warning posted Tuesday

Main Beach was posted, but not closed Tuesday morning after city

officials drained Broadway Creek. It was deemed safe to swim in later

that day by the Orange County Environmental Health Department.

Signs were posted warning swimmers about the water quality at Main

Beach, but swimming was still allowed about 500 feet north and south.

Officials decided to drain the creek because its water was becoming

stagnant and stinky.

“A creek like Broadway needs to be released occasionally before it

gets really unpleasant,” said Monica Mazur, supervising health

specialist for the environmental health department.

-- compiled by Mike Swanson