[quote=UCGal]* chula vista has big lots and fewer mello roos.[/quote]
I just want to clear up this misconception. 50-60% of Chula Vista actually HAS Mello Roos. However, the City encompasses 5 zip codes and is approximately 7 miles long by 13 miles wide. 91910 has the most larger lots but 91911, 91913 and 91914 also have properties with big lots (9K + sf).
What has been going on in 4S and surrounds in the last 3 years already happened in 91915 (Otay Ranch and parts of Eastlake Trails) beginning early 2006. This area is slightly older than 4S (first tracts finished in 2000). The values in Otay Ranch are further along in normalizing. There is SOME shadow inventory still left but most distressed units there have been foreclosed on or are in the process. There have been a few successful mods that I know of. 91915 has the highest MR in South County but it is not as high as the 4S MR. Much of the MR in Otay Ranch is also paid down an additional 3-5 years over that of 4S. One tract in 91913 paid off their MR in May 2007. Another set of tracts in 91910 will have their “street-bond” MR’s paid off in 2012. Since the City of Chula Vista debuted the formation of CFD’s in San Diego County in 1987, the residents here have all witnessed the results of this “experiment” first-hand and we have now come full circle.
The reality is that household funds that would have been spent on paint, siding, roof, windows, sod, concrete, etc, over the years has often had to go to MR when a choice had to be made. Many of the late 80’s/early 90’s built homes in these affected tracts have not been properly maintained. In some areas, sheets were still up on many windows up to three years after community buildout.
It’s very clear to anyone who can do the math that exorbitant MR obligations are not sustainable on a yearly basis for the average homeowner. Especially for a first-time buyer with no impounds who has to consciously budget for it. It is one of THE key causes of default, IMO. Add HOA dues to the MR and it is a recipe for disaster for a young family, especially one that is growing and/or depends on only ONE income.
Besides most of the units in 4S and surrounds originally selling for inflated prices during the “bubble-era,” the exorbitant MR in combination with HOA dues are the reasons why there is currently such heavy distress in the area, IMHO.
I believe 4S and surrounds still have several years to go to see stabilization of values. Some of its CFD’s bond-payback periods are for 5-10 years longer than Otay Ranch. We have all yet to see how this area will come out of the wash.
