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User Forum Topic
Submitted by SDEaves on November 26, 2012 - 2:38pm

Submitted by bearishgurl on November 26, 2012 - 2:45pm.

Would the five "affordable units" in the complex be set aside for rent ... or for sale at a lower price to qualified individuals/families?

And is the complex brand new construction or a condo conversion from a former apartment building?

Submitted by SDEaves on November 26, 2012 - 3:00pm.

The affordable units would be for sale only, just at a lower price to income qualified individuals/families.
The complex is brand new construction.
Bad investment? Do you think those units will affect resale value of regular units? Other potential pitfalls you may know of?

Submitted by bearishgurl on November 26, 2012 - 3:13pm.

SDEaves wrote:
The affordable units would be for sale only, just at a lower price to income qualified individuals/families.
The complex is brand new construction.

Okay, how MUCH lower of a price are the low income units selling for than the market (i.e. 20% 25%, etc)? For the first year that the project is sold out, the market rate buyers will have these lower sold comps to for any prospective sellers to contend with.

If the buyers buying the five low-income units are allowed to sell whenever they want to (have no "length-of-holding" clause in their contract) and they are limited to find buyers who fit the low income criteria as well, then there may be a stray "low-income sold comp" from your complex for you to contend with when you want to sell.

If the buyers buying the five low-income units today are not allowed to sell for, say five years or more and you know you won't hold the property for that long, then you will not have to contend with these (lower) sold comps during the time of your ownership if you can successfully sell when you want to.

Currently, you have only 5.5% of units selling at a lower price.

How much would the mo HOA dues be? And does the project have MR, and if so, for how many years?

And ... sorry to be repetitive, but are you absolutely positive that it is all brand new construction from the ground up?

Submitted by SDEaves on November 26, 2012 - 3:29pm.

These income-qualified units are being sold for 20 percent less than regular sale units.
No holding clause but they would only be able to resell their unit to another income-qualified person/family.
When you go to sell your regular unit, would those affordable housing comps be excluded from comparison to the regular sale?
Seems like there should be some special provision to protect regular resale but not sure?

Submitted by bearishgurl on November 26, 2012 - 3:37pm.

I am unaware of any appraisal standards which would preclude CA appraisers from using the "low-income" comp as a sold comparable to appraise the exact same market rate unit in the same complex. Of course, the listings of the low income units would state that they can only be sold to income-qualified buyers.

Will the low-income owners in the complex have to re-sell in the future at 20% less than "the current market" (whatever that turns out to be)? If so, how is their resale listing price determined? And who determines it? Are they allowed to make a profit upon sale?

I am not an appraiser (any Piggs??) but have taken the CA RE Appraisal course.

Submitted by bearishgurl on November 26, 2012 - 3:46pm.

Even though its only five units, depending on how much their carrying costs are (PITI + HOA + poss MR), I just feel that the buyers of the low-income units will be more vulnerable than the market-rate buyers (ie forced to sell or walk away). These carrying costs added up together are FAR MORE than if the low-income buyer was simply a tenant.

If the five units were going to be occupied by tenants renting from a local housing authority or agency, I would opine that these units won't affect either the marketability OR resale-ability of the market-rate units. In coastal CA counties, these rent-subsidized tenants seldom cause ANY kinds of problems because they would be in danger of losing their (lifetime) voucher upon eviction. Thus, depending on location, they will likely remain for many years.

Submitted by bearishgurl on November 26, 2012 - 3:59pm.

I just pm'd Pigg UR on your behalf to respond to this thread. There are a few newer bldgs in his stomping ground (ex: East Village) which had a few low-income units for sale when the projects were new.

Perhaps enough units have resold in these projects to be able to answer your question.

Submitted by SDEaves on November 29, 2012 - 12:33pm.

bearishgurl wrote:
I just pm'd Pigg UR on your behalf to respond to this thread. There are a few newer bldgs in his stomping ground (ex: East Village) which had a few low-income units for sale when the projects were new.

Perhaps enough units have resold in these projects to be able to answer your question.

Submitted by urbanrealtor on November 26, 2012 - 5:30pm.

SDEaves wrote:
These income-qualified units are being sold for 20 percent less than regular sale units.
No holding clause but they would only be able to resell their unit to another income-qualified person/family.
When you go to sell your regular unit, would those affordable housing comps be excluded from comparison to the regular sale?
Seems like there should be some special provision to protect regular resale but not sure?

Re resale:
Typically, the units I have dealt with, have a 40 year deed rider that ties the resale value of the property to the median county income. That means that if values spike, you sell at the income-defined price (which would be below market). Likewise, if the values tank, you sell ABOVE market (or, rather, fail to sell).

In other words, you have all the risk of being a homeowner with virtually none of the rewards (except static cost of housing). Without some speculative potential reward, there really is not a huge incentive to buy.

Re appraisal:
By definition, the affordable units are not open market sales. However, not all appraisers know about this program and not all listing agents mention it in the remarks. Therefore, I have had multiple appraisals plopped on my desk when my loan officer (who has the desk next to mine) says "What the fuck is this?!!!".

In other words, it shouldn't affect normal sales but in practice it does because the deed riders and restrictions don't show on databases as they should.

I am a liberal and a believer in government helping the less privileged.
This is not an example of that help.
This is a terrible program and only will cause hurt to owners.
Avoid it.

Submitted by SDEaves on December 19, 2012 - 4:43pm.

urbanrealtor wrote:
SDEaves wrote:
These income-qualified units are being sold for 20 percent less than regular sale units.
No holding clause but they would only be able to resell their unit to another income-qualified person/family.
When you go to sell your regular unit, would those affordable housing comps be excluded from comparison to the regular sale?
Seems like there should be some special provision to protect regular resale but not sure?

Re resale:
Typically, the units I have dealt with, have a 40 year deed rider that ties the resale value of the property to the median county income. That means that if values spike, you sell at the income-defined price (which would be below market). Likewise, if the values tank, you sell ABOVE market (or, rather, fail to sell).

In other words, you have all the risk of being a homeowner with virtually none of the rewards (except static cost of housing). Without some speculative potential reward, there really is not a huge incentive to buy.

Re appraisal:
By definition, the affordable units are not open market sales. However, not all appraisers know about this program and not all listing agents mention it in the remarks. Therefore, I have had multiple appraisals plopped on my desk when my loan officer (who has the desk next to mine) says "What the fuck is this?!!!".

In other words, it shouldn't affect normal sales but in practice it does because the deed riders and restrictions don't show on databases as they should.

I am a liberal and a believer in government helping the less privileged.
This is not an example of that help.
This is a terrible program and only will cause hurt to owners.
Avoid it.

Submitted by bearishgurl on November 26, 2012 - 11:02pm.

urbanrealtor wrote:
SDEaves wrote:
These income-qualified units are being sold for 20 percent less than regular sale units.
No holding clause but they would only be able to resell their unit to another income-qualified person/family.
When you go to sell your regular unit, would those affordable housing comps be excluded from comparison to the regular sale?
Seems like there should be some special provision to protect regular resale but not sure?

Re resale:
Typically, the units I have dealt with, have a 40 year deed rider that ties the resale value of the property to the median county income. That means that if values spike, you sell at the income-defined price (which would be below market). Likewise, if the values tank, you sell ABOVE market (or, rather, fail to sell).

In other words, you have all the risk of being a homeowner with virtually none of the rewards (except static cost of housing). Without some speculative potential reward, there really is not a huge incentive to buy.

Re appraisal:
By definition, the affordable units are not open market sales. However, not all appraisers know about this program and not all listing agents mention it in the remarks. Therefore, I have had multiple appraisals plopped on my desk when my loan officer (who has the desk next to mine) says "What the fuck is this?!!!".

In other words, it shouldn't affect normal sales but in practice it does because the deed riders and restrictions don't show on databases as they should.

I am a liberal and a believer in government helping the less privileged.
This is not an example of that help.
This is a terrible program and only will cause hurt to owners.
Avoid it.

Ah, the Piggs thank you, UR, for your predictably wise "in-the-trenches" counsel on this rather "thorny" subject. As I suspected, what happens on the street and what should "theoretically happen" are often night and day from one another :)

*************************************

SDEaves, I take it you did not purchase the SFR's, PUD or the Tierrasanta townhome you were considering back in October:

http://piggington.com/townhouse_close_to...

and when the Piggs tried to help you get clarity then:

http://piggington.com/for_piggs_with_kid...

... you never let us know the outcome of which type of housing you actually decided on ;=]

The fact of your price range being ~360K was the catalyst which led you to a project such as the one you viewed over the weekend, IMHO. This sort of implies that you are leaning towards any new construction which could be found in your price range.

Since you stated you have been looking for a residence for more than a year, would you mind filling us in on the results of your recent search since your last threads? :)

Submitted by SDEaves on November 27, 2012 - 10:52am.

BG,
Just as you said last month, homes in our price range are getting snatched up by cash buyers.
Since last month's post, we have put in 2 offers in LM but to no avail. One was taken by an investor; the other we were outbid.
We are still searching. As you and other Piggs have said, inventory is extremely low in our price range. So this all should come as no surprise to you ;) Your last post implies some sort of impatience at us taking our time with buying and asking questions in the meantime. Perhaps I read into your last post wrong? We will gladly update you once we close escrow on a home. Please send us good luck with our search- we need it!

Submitted by bearishgurl on November 27, 2012 - 11:51am.

SDEaves wrote:
BG,
Just as you said last month, homes in our price range are getting snatched up by cash buyers.
Since last month's post, we have put in 2 offers in LM but to no avail. One was taken by an investor; the other we were outbid.
We are still searching. As you and other Piggs have said, inventory is extremely low in our price range. So this all should come as no surprise to you ;) Your last post implies some sort of impatience at us taking our time with buying and asking questions in the meantime. Perhaps I read into your last post wrong? We will gladly update you once we close escrow on a home. Please send us good luck with our search- we need it!

Glad to hear you have been actively placing offers, SDEaves. The reason of my mentioning that you stated on your previous thread that you took a year to "look?" is because that is a very long time to simply "look" while interest rates are inching lower and lower, thereby increasing your competition. Perhaps you also placed (unsuccessful) offers during that time frame but my understanding was that you didn't and were just "looking."

I stand by my prior recommendations for you of SFR's in LM, LG, Lakeside, Santee, and even Spring Valley (now on the SR-125). As a family of five with three small children, you don't have to accept a condo today. With a condo, even in the absence of low income units, your future saleability and future sales price is largely out of your control. These factors are in the control of your neighbors in the complex, the quality of construction and most of all, the HOA. If you buy a condo now, you will invariably grow out of it and may not easily be able to sell. Even if you CAN successfully sell and recover all or most of your DP, you will then have to qualify to purchase the same SFR's you are looking at today at a higher price. You stated your family is not a "dual income" family.

The type of residential market we've had here in the past 18+ months is the type where buyers (ESP those in your price range) must be willing and able to immediately act and have your counter offer figure at the ready in case there is competition for the property. You can sort out the condition of the property later in escrow with an inspection contingency. The only way I see that you can initially lose out this way is if the property is an obvious "heavy fixer" (which you would not likely place an offer on, anyway) and cash investors waiving the inspection contingency are flocking to it. This doesn't typically happen today unless there is a LOT of potential "sweat equity" in the property due to its "location."

If I was in your shoes and had to choose a daily commute of equal distance using the SR-52 or SR-125, I would consider those communities along the SR-52 first. The SR-125 is much more crowded because it now comes from the int'l border (its toll road ceases at SR-54). HOWEVER, the properties in your price range will have more "curb appeal" (likely have older, raised foundations) in LM and LG. Lakeside DOES have some properties like this, but many of them have split-level backyards (which you might like - they are "horse properties").

If you will continue to look and place offers in the areas I have just mentioned again here, I don't believe you will run up against as much competition as you have been. These areas are favored by individual buyers who grew up there and also for their larger lots with more liberal zoning. You won't be running across these hundreds of "dual-income parent" buyers from somewhere else who are primarily looking for a "lifestyle" as you may have been in the past. You will hopefully instead land a good solid home with room for possible expansion that would last your family for many years.

JM2 cents ... and the best of luck on your search, SDEaves.

Submitted by EconProf on November 27, 2012 - 4:04pm.

This program is a wonderful example of what happens when the local government interferes with the natural outcomes of the free market. In this case, five out of ninety buyers get a 20% break on the purchase price. The initial impact is a slightly higher price for the other 85, since the developer has to spread the discount among the other buyers.
That should only amount to a $5000 bump to their price. But with the "cloud over the title" that has been described, the hit to future values upon resale is unknown, and could be much more. Knowlegeable buyers will steer clear, thus hurting prices and costing the developer an unknown amount.
So the government manages to cost the vast majority of buyers much more than the subsidy to the lucky few poor families who get to buy, who, by the way benefit little in terms of future appreciation. The developer is forced to do this in order to get permission to build to satisfy local housing activists (and I believe to get higher densities), and politicians get to claim they are doing something to lower housing costs. And the few buyers that are helped are a tiny fraction of the needy population. Net net society as a whole loses far more than it gains.
We could lower housing costs far more efficiently by removing silly barriers to growth that local governments erect.

Submitted by urbanrealtor on November 27, 2012 - 4:50pm.

EconProf wrote:
This program is a wonderful example of what happens when the local government interferes with the natural outcomes of the free market. In this case, five out of ninety buyers get a 20% break on the purchase price. The initial impact is a slightly higher price for the other 85, since the developer has to spread the discount among the other buyers.
That should only amount to a $5000 bump to their price. But with the "cloud over the title" that has been described, the hit to future values upon resale is unknown, and could be much more. Knowlegeable buyers will steer clear, thus hurting prices and costing the developer an unknown amount.
So the government manages to cost the vast majority of buyers much more than the subsidy to the lucky few poor families who get to buy, who, by the way benefit little in terms of future appreciation. The developer is forced to do this in order to get permission to build to satisfy local housing activists (and I believe to get higher densities), and politicians get to claim they are doing something to lower housing costs. And the few buyers that are helped are a tiny fraction of the needy population. Net net society as a whole loses far more than it gains.
We could lower housing costs far more efficiently by removing silly barriers to growth that local governments erect.

Amazing.
You frame your arguments with sufficient partisan vitriol that I need to re-think my positions every time you agree with me.
I am also glad that you agree.

Submitted by EconProf on November 27, 2012 - 5:25pm.

UR: Just trying to analyze the economic and societal impact of the policy, and was building upon your thorough description of its mechanics. Would be interested to know your thoughts on my interpretation.

Submitted by bearishgurl on November 27, 2012 - 6:12pm.

Very insightful post, Econprof.

My experience has been that these projects which need a "set aside" of a certain number of units for rent or purchase by low-income individuals and families (in order to get a permit to build at all) are invariably situated in smaller cities who want to "grandstand" that they're "doing something" about the cost of housing. I've seen this type of "set aside" in complexes in Del Mar and Coronado (yes, Coronado). And there are several in Carlsbad. They serve as political "showpieces" for these small governments who can now say they did! "And look, [visiting dignitaries] ... here it is! Let me take you on a tour of the grounds. We're so proud of it!" Of course, they don't advertise the fact that those new sucker "owners" are going to lose their a$$es on their "investment" in this debacle.

I'll bet if the same developer wanted to put up low income rental units on 69th Street or Skyline Dr in SD and sell them to non-profits and let the local housing agency manage them, the City of SD would not only give them tax credits to do so but PAY THEM a BIG BONUS to tear down and clean up the unfinished albatross the last "low-income" housing developer left behind 20+ yrs ago when they went belly-up! They could REALLY MAKE A DENT in the "affordable housing" problem there. They won't HAVE to "set aside" a "token" amount of units built on expensive land. It may have an existing teardown but they can likely still get a very suitable parcel for these projects in 92105, 92113, 92114, 91945 and 91977 ... yes even today.

My personal feeling (however "unpopular" it may sound) is that housing in CA coastal cities has traditionally been tiered in a "caste system." The "dues-paying" homeowners (ones with prior "sweat equity" in two or more CA coastal properties or those who are otherwise independently well off) are the ones who are likely to have the cash and stamina for the long haul to purchase and maintain a SFR in the most coveted coastal areas.

A "transplant" family of four making <$50K should not expect to waltz into one of these counties and demand to live in a beach area or other coveted, established area, unless they can otherwise afford it. They can start their property-shopping (or rental shopping) expedition on 47th St in SD (or other similarly situated areas), just like I did. And a "native" family of four making <$50K can often employ their local relatives' help in obtaining and getting a nearby available fixer ready for them to occupy. Many young locals DO go this route, especially those who want grandparents nearby (for childcare). Some Piggs might be shocked to learn that if they took a door-to-door survey of longtime homeowners on the best streets in SD (WTH, start on Rutgers Rd in LJ) they would learn that many of these owners bought their FIRST properties in nondescript tracts on very "humble" streets in 92102, 92104, 90105, 92115 and 92116.

Everybody has to start somewhere.

I'm not referring to the OP here (don't know how old they are or their preferences) but too many Gen Y entering the housing market today seem to just want the best areas or nothing. Or brand new construction or nothing. Their "expectations" are very often unrealistic for their earning capacity and asset level, IMHO.

The most desirable CA coastal cities have never been "set up" to house families who can't afford to live there. They're not for everyone.

That's what places like Fresno, Victorville, AZ and TX are for :)

Submitted by Jazzman on November 28, 2012 - 10:36am.

SDEaves wrote:
BG,
Just as you said last month, homes in our price range are getting snatched up by cash buyers.
Since last month's post, we have put in 2 offers in LM but to no avail. One was taken by an investor; the other we were outbid.
We are still searching. As you and other Piggs have said, inventory is extremely low in our price range. So this all should come as no surprise to you ;) Your last post implies some sort of impatience at us taking our time with buying and asking questions in the meantime. Perhaps I read into your last post wrong? We will gladly update you once we close escrow on a home. Please send us good luck with our search- we need it!

With inventory so low, and the frustration of being out-bid, why don't you put your search on hold until things improve. Look at these numbers. Things aren't improving. http://www.deptofnumbers.com/asking-pric...

Never, ever bow to pressure from a Realtor. As far as your OP is concerned, you may be a little over-concerned in respect of values. Although some appraisers may be initially confused, it seems pretty clear cut that the two values are not interconnected, which would be made clear to any prospecting buyers, just as you yourself found out.

I personally wouldn't hold out for any appreciation down the road anyway. The best investments in this market are not based on future potential, but on how well you managed to negotiate the seller down on price. If that is not possible due to shortage of supply, you run the risk of your investment remaining flat. A great time to borrow doth not a great time to buy maketh.

Submitted by SDEaves on November 28, 2012 - 11:33am.

Jazzman wrote:
SDEaves wrote:
BG,
Just as you said last month, homes in our price range are getting snatched up by cash buyers.
Since last month's post, we have put in 2 offers in LM but to no avail. One was taken by an investor; the other we were outbid.
We are still searching. As you and other Piggs have said, inventory is extremely low in our price range. So this all should come as no surprise to you ;) Your last post implies some sort of impatience at us taking our time with buying and asking questions in the meantime. Perhaps I read into your last post wrong? We will gladly update you once we close escrow on a home. Please send us good luck with our search- we need it!

With inventory so low, and the frustration of being out-bid, why don't you put your search on hold until things improve. Look at these numbers. Things aren't improving. http://www.deptofnumbers.com/asking-pric...

Never, ever bow to pressure from a Realtor. As far as your OP is concerned, you may be a little over-concerned in respect of values. Although some appraisers may be initially confused, it seems pretty clear cut that the two values are not interconnected, which would be made clear to any prospecting buyers, just as you yourself found out.

I personally wouldn't hold out for any appreciation down the road anyway. The best investments in this market are not based on future potential, but on how well you managed to negotiate the seller down on price. If that is not possible due to shortage of supply, you run the risk of your investment remaining flat. A great time to borrow doth not a great time to buy maketh.

Very sage advice. Thank you.

Submitted by spdrun on November 28, 2012 - 11:42am.

Never bow to pressure from a broker is about right. A few months ago, I put an offer on a short in MV at ~90% of ask. Broker kept saying that I'd never get it unless I offered ask or above. Well, today I got a call that the winning bigger failed to perform, and could I please send an updated proof of funds.

Submitted by SDEaves on November 28, 2012 - 11:49am.

spdrun wrote:
Never bow to pressure from a broker is about right. A few months ago, I put an offer on a short in MV at ~90% of ask. Broker kept saying that I'd never get it unless I offered ask or above. Well, today I got a call that the winning bigger failed to perform, and could I please send an updated proof of funds.

Congratulations!

Submitted by dumbrenter on November 28, 2012 - 12:57pm.

Jazzman wrote:
A great time to borrow doth not a great time to buy maketh.

I'll have to frame this and send it as a holiday gift to some of my 'friends'.
You might want to (TM) it!

Submitted by spdrun on November 28, 2012 - 1:00pm.

Congratulations!

Thanks! We'll see - could be 8 other offers on the place getting the same runaround.

Submitted by Jazzman on November 28, 2012 - 1:39pm.

dumbrenter wrote:
Jazzman wrote:
A great time to borrow doth not a great time to buy maketh.

I'll have to frame this and send it as a holiday gift to some of my 'friends'.
You might want to (TM) it!


I'll happily forego the TM to see it indelibly stamped on the forehead of the CEO of the NAR. :)

Submitted by bearishgurl on November 28, 2012 - 2:21pm.

Jazzman wrote:
SDEaves wrote:
BG,
Just as you said last month, homes in our price range are getting snatched up by cash buyers.
Since last month's post, we have put in 2 offers in LM but to no avail. One was taken by an investor; the other we were outbid.
We are still searching. As you and other Piggs have said, inventory is extremely low in our price range. So this all should come as no surprise to you ;) Your last post implies some sort of impatience at us taking our time with buying and asking questions in the meantime. Perhaps I read into your last post wrong? We will gladly update you once we close escrow on a home. Please send us good luck with our search- we need it!

With inventory so low, and the frustration of being out-bid, why don't you put your search on hold until things improve. Look at these numbers. Things aren't improving. http://www.deptofnumbers.com/asking-pric...

Never, ever bow to pressure from a Realtor. As far as your OP is concerned, you may be a little over-concerned in respect of values. Although some appraisers may be initially confused, it seems pretty clear cut that the two values are not interconnected, which would be made clear to any prospecting buyers, just as you yourself found out.

I personally wouldn't hold out for any appreciation down the road anyway. The best investments in this market are not based on future potential, but on how well you managed to negotiate the seller down on price. If that is not possible due to shortage of supply, you run the risk of your investment remaining flat. A great time to borrow doth not a great time to buy maketh.

Ahem ... a few of things come to mind, here Jazzman ...

First, if you're referring to me, I am not at present a "Realtor." I am a nearly 30-yr licensee (not active) and have resided in SD County (permanently) for ~35 yrs. I have resided in CA for nearly 50 yrs. So I have seen more than a few RE cycles here. In addition, I have been a "principal" more times than I can count on my fingers.

You are opining here that RE will remain flat when that is not what has been happening in the last nearly two years in CA coastal counties, especially in areas within ~12 mi from the coast. Of course, desirability varies widely from community to community but they aren't making any more land <10 mi from the coast. I don't think the OP's "Realtor" was "pressuring" them. In fact, he stated his "realtor" showed him properties for a year simply so he and his spouse could "familiarize" themselves with SD County.

http://piggington.com/townhouse_close_to...

The reality is that most "Realtors" acting as buyer's agents (myself incl) not only would want an executed Buyer-Broker Agency Agreement in place at all times to do this, but WOULD grow impatient spending hundreds of hours and many gallons of gas with a FT buyer who might ultimately defect (and purchase) in a new construction tract. Based upon his posts, not only has he toured new construction tracts (incl the complex in the OP) and considered purchasing there, his agent has been exceedingly patient and cooperative with the OP's "window shopping," even though he may very well end up making nothing, due to not taking better control of the situation.

LOL. Compare what I'm telling the OP here to Pigg flu's recent assertion that he can't get good advice out of a "financial advisor" because they "get paid to tell people this stuff" and the info they dole out is "proprietary."

http://piggington.com/cash_out_refinance...

I "gave" this OP a little tidbit of "free advice" on how to win a bid for a single family home in his $360K price range for his young family in THE CURRENT market in SD County. And I'm not even his "Realtor!" Of course, he is free to take it or leave it.

I see here that the OP states he has recently placed two (unsuccessful) offers in LM (an area I suggested to him in Oct). He needs to keep on keepin' on, IF he really wants a house, IMHO. And the sooner they can close, the better. They've had enough time to "familiarize themselves." There's nothing wrong with that, btw, but in their case, this "familiarizing time" turned out to be concurrent with a time which prices in areas of their original target market (NE suburban SD) rose exponentially.

***

Jazzman, let's assume arguendo that SDEaves buys a market-rate unit in the complex he posted about in his OP.

I have looked at a ~3 yr-old version of the CA Transfer Disclosure Statement (and don't know if it's changed since then), but I don't believe there are any questions on there that ask the seller whether they know of any "inclusionary" or "set aside" units in their complex for low-income buyers or renters (UR, SDR, etc, please correct me if I'm wrong here). If there is no current sold comp or current listing among the five inclusionary units when the OP accepts an offer to purchase in the future, then why would he have to disclose at all that such units even exist? This "cloud" on the title of the five IU's won't be on HIS title report (which will be ordered up by potential buyers) and I am unclear if the CC&R's would have any need to mention it because those five owners are entitled to the same rights of enjoyment of the amenities, etc as the market-rate buyers.

If I'm reading your post right, Jazzman, you are stating here that a market-rate seller in this complex should tell a buyer he has in escrow to, "[i]gnore that (~20% lower) recent sold comp because my unit is `market-rate.'" However, their lender is not going to "ignore" the appraisal they just got. Who do you think buys these units, Jazzman? Do you think it is buyers who are able and willing to reach into their pockets (while in escrow) to make up the difference between what the condo appraises for and what the seller wants??

Even if a future seller of a market-rate unit doesn't have to contend with a listing or recent sold comp from among the five inclusionary units, I just feel that those five owners are so vulnerable to short sale, foreclosure or walking away due to the high carrying costs (over rent of a comparable unit) and later possibly taking their title report to an attorney and being advised to let it property go. These five units perpetually in "distress" on the public record don't bode well for the market-rate sellers' future values, IMO.

***

Jazzman, I agree with your statement about "deal-making at the outset" being critical. This applies to accepting employment, also :]

HOWEVER, "deal making," if it includes counter-counter-counter-counter offers are a wee bit harder to get a seller to "entertain" when there is so little on the market to choose from. Of course, sellers today are aware of the inventory shortage. Jazzman, you're forgetting that THIS buyer (the OP) isn't looking for a retirement home or a second home, as you were (and you didn't want to but ended up "giving up" on Cali, even though your spouse's relatives live here):

http://piggington.com/8_years_later_it_h...

http://piggington.com/8_years_later_it_h...

Conversely, the OP here is looking for a suitable place to raise three young kids, which he can purchase for ~$360K, with a short commute to his work, which is in the Tierrasanta/Miramar area.

Jazzman, I'm happy for you that you found a "retirement" home in HI which you are happy with and were/are looking for another home in Europe.

http://piggington.com/housing_a_lost_dec...

http://piggington.com/january_2012_resal...

http://piggington.com/january_2012_resal...

http://piggington.com/ot_where_would_you...

But that's not the situation this OP is in. He NEEDS a home HERE in SD County because he WORKS HERE and he NEEDS a mortgage in order to buy one.

Ask yourself how much less than a $360K home SDEaves will be able to buy if interest rates go up even .5% ? And more importantly, if rates begin to rise, how long will it take them to do so? And will the OP be "locked in" and in escrow, already closed, or "still looking" while rates are rising??

You are imparting your views to this OP of Cali RE being "overpriced" because you refused to pay the price sellers wanted for the retirement homes you wanted in Cali after "shopping" and "making offers" up and down the state for many months. So you don't have a house in Cali because someone else paid more for the ones you wanted. And you never "bowed to any `realtor pressure'" ... but ... were you successful? Uhhh ... no.

That is how I see your story. Do I have it all correct, Jazzman??

SDEaves, you may take Jazzman's "sage advice" at your peril. And while you're doing it, just keep in mind ONE THING ... Uhhh .... he's not here anymore and there's a reason for that. ;=]

Submitted by flu on November 28, 2012 - 2:54pm.

Speaking of new construction....

A lot of new construction give a buyer agent commission. But the deal is you have to let the buyer agent sign you up... (And no, i don't think the new construction gives you the credit if you don't have a a buyer agent, at least not with the Pardee communities)

Submitted by Jazzman on November 28, 2012 - 3:25pm.

I should I suppose presage my posts with "now wait for the Realtors responses to come fighting back". BG, it was not aimed at you, just a general note of caution, and since you claim not to be a Realtor, I'm sure you will agree that pressure from a broker is usually a pretty one sided affair and to be avoided. As for the rest of your essay, I will have to come back to you. Got to dash (from my $270/sq ft home in paradise with no property tax) to catch the next big surf. Yep, there's a good reason indeed. Common sense mostly.

Submitted by bearishgurl on November 28, 2012 - 6:53pm.

Jazzman wrote:
I should I suppose presage my posts with "now wait for the Realtors responses to come fighting back". BG, it was not aimed at you, just a general note of caution, and since you claim not to be a Realtor, I'm sure you will agree that pressure from a broker is usually a pretty one sided affair and to be avoided. As for the rest of your essay, I will have to come back to you. Got to dash (from my $270/sq ft home in paradise with no property tax) to catch the next big surf. Yep, there's a good reason indeed. Common sense mostly.

Hmmm, looks like Jazzman's current tax bill for his condo is approximately $2173.50.

http://www.co.maui.hi.us/index.aspx?NID=755

http://www.co.maui.hi.us/documents/24/99...

That's not "nothing" .... it's .575%, which is a little less than half the (ad valorem + local svcs) rate of "city" parcels in Cali w/o MR (more than half of the tax base of uninc parcels). Perhaps Maui doesn't have as many "services" available to its residents as we do. Being completely "waterlocked," they certainly don't have anywhere near the population we do to use them.

Acc to his post below, Jazzman paid ~$378K for his 1400 sf condo (new construction):

http://piggington.com/january_2012_resal...

That's not such a "good deal" in a lot of areas of SD but might be there. I have no idea.

Jazzman, are there sidewalks, street lights and storm drains in your neighborhood??

I will concede that one doesn't need a full wetsuit to get into the water in Maui in Nov/Dec, lol ;-)

Submitted by Jazzman on November 28, 2012 - 11:41pm.

I think I paid about $450 in property tax, so small I can't remember and can't be bothered to look it up, but your calculations are way off. Different rates for kama'aina. There's street lights, a run-off canal, sidewalks, ocean front (literally pied dans l'eau) restaurants, cafes, movie theaters and yes a Costco. I'm one minute from stores and restaurants and the best beaches in the world, lots of sunshine, and the whales arrive this month and will be frolicking about outside my front door (well ...nearly).

Soon we're off to France and will be buying a beautiful stone farmhouse. The total tally will be our budget for California. Yep, two homes, in two of the most beautiful regions of the world for the price of one nothing-out-of-the ordinary single family home in southern California.

Here's what's on offer in France
http://www.rightmove.co.uk/overseas-prop...
http://www.rightmove.co.uk/overseas-prop...
http://www.guillon-immobilier.com/detail...

Now I love California and the people, so don't get me wrong here, but they think they've got it right, and when it comes to home prices ...well, they haven't! According to a survey reported on NBC tonight, CA is the worst run state in the country. Now I don't know about that, but I do know value when I see it.

Submitted by spdrun on November 29, 2012 - 12:50am.

Apart from the ages of the homes, it's not as if you can't find similar deals in rural Vermont or some parts northern California/rural Oregon. We're not talking about Parisian pricing here.

As far as bureaucracy and taxation, France is far from being free of it, rather the opposite. Though the good thing is that there's a much bigger tradition of lawbreaking and evasion there, so the effects of the bureaucracy tend to be tempered.

Vive l'anarchie!

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