- This topic has 17 replies, 11 voices, and was last updated 17 years ago by
farbet.
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August 28, 2007 at 1:59 PM #10084August 28, 2007 at 2:17 PM #82171
barnaby33ParticipantEvery time Rome burns, you gotta get the kindling from somewhere. It just so happens that its SEH and Otay.
Josh
August 28, 2007 at 4:13 PM #82222gn
ParticipantIf so, are the builders so confident of continued demand that they're willing to fill every available square foot of land with a house or apartment?
The builders already purchased the land & put in the infrastructure (sewage, water, electrical …). They already put too much money in the project to walk away. They have no choice but to press forward.
So, it's not that the builders are "confident of continued demand". It's "if we press forward we'll lose a lot of money, if we walk away we'll lose even more".
August 28, 2007 at 4:52 PM #82234drunkle
Participanti would bet that san elijo has been long bought and paid for. it’s a project that started grading what, 10 years ago? whatever the minor 10% or 20% price “correction”, you’re still talking about price “inflation” of some 300%.
August 28, 2007 at 5:32 PM #82268farbet
ParticipantTax rate in SEH is 1.6%. The .6 is the Mello RoosI believe. With HOA added about 5K per year
August 28, 2007 at 8:49 PM #82348Bugs
ParticipantThat about sums it all up.
August 28, 2007 at 8:51 PM #82349psteach
ParticipantI want to thank all of the above, but especially El Jefe, for explaining what to the layman seems irrational business strategy. Next time I drive through, I feel like I know better what’s going on. This is a great site for an ignorant but interested observer (such as myself) for understanding what’s happening in the area.
August 28, 2007 at 10:12 PM #82353temeculaguy
ParticipantAwesome post El Jefe, I think some of the houses being built were decided on a month or two ago in a different credit climate and once the foundation is poured or the framing starts it is cheaper to just finish it and sell it. The lots that haven’t been started yet are being decided on now, especially those where the street hasn’t been paved, that will be more revealing than than the ones actively under construction.
August 29, 2007 at 6:37 AM #82368Alex_angel
ParticipantEl Jefe, 4S is near complete, not at all in the same situation as SEH or Del Sur. There are only a few developments finishing up in 4S and its done. SEH on the other hand is still in the midst of their plan.
August 29, 2007 at 8:40 AM #82377ocrenter
Participantmello roos for SEH is .5%
but the base property tax rate is 1.25%
total of 1.75%
a 2500sqft SFR in 2002 there went for $450,000, that’s $7800/year in total property tax, or $2250 of that was the mello roos part.
at the height of the market in 2005 and early 2006, a 2500 sqft SFR went for $800,000, or $14,000/year in total property tax, or $4,000 for the mello roos.
remember, the losers that bought at the top can get the 1.25% part readjusted, but they’ll never going to be able to get the $4,000 in mello roos readjusted.
it is hard enough to part with $7800 split into two lump sums. imagine having to cut a $7000 check twice a year to the county! as the property prices continue to correct, a lot of these homeowners are going to just walk away.
and this effect is not just short term,
years from now regardless of the state of real estate, the buyers are going to ask, is that SEH home you are selling a 2005 model? if you say yes, expect to give some serious discount on that home.
August 29, 2007 at 8:51 AM #82378ParticipantSubdivisions sat for almost decade before they were finally built out in 88-89. My gut says that you will see the same thing in 4S and SEH.
El Jefe,
I think that the above statement is more applicable to Del Sur than 4S Ranch. That's because they didn't start building in Del Sur until 2006. Where as, 4S is 75% completed. Am I right ?
August 29, 2007 at 9:35 AM #82383Participantocrenter, that $1750 a year extra for mello roos is not going to be a deal breaker if you had a 2005 home that is in pristine shape vs. a 2002 home that needed some work done.
August 29, 2007 at 10:13 AM #82390Participantalex, that 2002 may be well upgraded with all the trimmings with less neighbors in trouble vs. the 2005 base model with dirt and weed in the backyard.
plus, the 2002 owner can sell for $600,000 and still make out well, the 2005 owner is stuck until the bank foreclose.
and why would you want to pay an extra $1750 a year to use the same exact roads and the same exact facilities when the age of the homes are only 3 years apart?
August 29, 2007 at 10:20 AM #82395Ex-SD
ParticipantAlex, there are a LOT of people who will not even look at a home “for sale” that has the Mello Roos tax penalty associated with it. When I lived in SD, I worked with a man who made over $200k a year and managed his money wisely. He and his wife were looking for a home and he wouldn’t even go with the RE agent to look at any property that had the idiotic M.Roos tax. So, don’t assume that everyone, no matter what their income will just hand over an extra $1750 per year for no good reason.
August 29, 2007 at 12:26 PM #82428El Jefe
ParticipantI think that the above statement is more applicable to Del Sur than 4S Ranch. That’s because they didn’t start building in Del Sur until 2006. Where as, 4S is 75% completed. Am I right ?
You may very well be corect. I really do not know any particulars about 4S. In fact, I didn’t even know where it was on a map until about 6 months ago. Mmost of my comments were more directed towards SEH as I am much more familiar with the situation there. If 4S is indeed nearly complete, I’d bet dollars to doughnuts that the money has already changed hands for the remainder of the lots and the builders will suck it up and finish building hoping to break even.
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