The California Association of Realtors’ Traditional Housing Affordability Index shows that the minimum annual household income required to buy a median-priced home in Orange County is $146,880 and that just 22% of hopeful homebuyers can comfortably afford that $745,160 price tag.
That begs the question of how much it takes to afford OC’s luxury home market, which is defined as the top 5% of active listings. The entry price is about $4 million.
The answer, assuming the same circumstances of the $745,160 buyer cited in the study: 20% down and a 30-year fixed-rate mortgage at a 3.91% interest rate, is approximately $610,000, according to Zillow’s Affordability calculator.
That number assumes a $3.2 million mortgage with a $19,812 monthly payment, not including any homeowners association fees, which in some high-end enclaves can be about $1,000 a month, or monthly living expenses. A more realistic household income number—given other monthly expenses and utilities—would be between $720,000 and $750,000.
How about for one of those stunning oceanfront palaces that fetch $15 million or more?
Of course, at that level, many buyers—business owners looking for a place to park their money for the tax benefits; foreign nationals; celebrities—pay cash or leverage assets such as stock portfolios, so salary isn’t necessarily the driving factor.
Those taking out a mortgage would see the $3 million for the required 20% down payment bring the mortgage to about $12.5 million, with a monthly payment of just over $64,000. Maintenance, staffing costs, property tax and annual debt service and other expenses would necessitate an annual household income of approximately $4 million.
Quintessential Coastal Living
The Crystal Cove estate at 17 High Water in Newport Coast sold on Feb. 8 for $16.75 million. The estate was originally listed in January for $18.8 million.
The recently completed transitional-style property encompasses 12,352 square feet of living space on a .47-acre parcel. It offers six bedroom suites, seven full bathrooms, two powder rooms, a wine cellar, a home theater, open-air atrium and a library-office. There are also powered pocketing doors that lead to the ocean-facing backyard and an elevator to all three levels.
Outdoor amenities include a custom 360-degree Infiniti edge pool, barbecue pavilion, and outdoor cabana with fireplace, TV and large fire pit viewing area, all surrounded by well-appointed hardscape and landscapes.
Rex McGown and Marcy Weinstein of Surterre Properties Inc. represented the seller, and Marcus Gualter of Coldwell Banker Residential Brokerage represented the buyer.
Villa By the Sea
The home at 39 Smithcliffs Road in Laguna Beach, sited on a prime .33-acre oceanfront parcel in the private, gated Smithcliffs community, is reminiscent of a villa along the Mediterranean Riviera. It sold on Feb. 6 for $10 million.
The home accommodates both family living and large-scale entertaining in a five-bedroom, six-bath floor plan. Its 6,500 square feet include a library, great room, formal dining room and gourmet country kitchen. There are ocean views from nearly every room.
The home’s materials include Beaumaniere limestone, quartzite, granite and marble. French doors, eight artisan fireplaces, picture windows, honed wood beam ceilings, water purification and a security system are among the other amenities.
John Stanaland of HÔM Sotheby’s International Realty represented both sides of the transaction. It was listed in September for $11.9 million.
Irvine Terrace Jewel
The ocean view, single-level residence at 432 Angelita Drive in Corona del Mar sold on Feb. 10 for $6.4 million. The list price in November was $6.58 million.
The home encompasses 5,300 square feet, has four en-suite bedrooms with bath, plus an additional bath. Its gourmet kitchen includes all stainless steel appliances, a granite island and wall-to-wall, built-in custom cabinets.
It’s situated on a .26-acre lot in beach-close Irvine Terrace, and includes a secluded loggia, flagstone fireplace, outdoor kitchen and a Jacuzzi with a waterfall wall.
The transaction was represented by Rob Udell of Tarbell, Realtors Irvine on the seller’s side and by Robert Clarke of Surterre Properties on the buyer’s.