Home › Forums › Closed Forums › Buying and Selling RE › Pardee Homes Drops Mello Roos in new development in Moorpark (Ventura)
- This topic has 44 replies, 17 voices, and was last updated 16 years, 2 months ago by masayako.
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January 11, 2007 at 8:37 AM #43205January 11, 2007 at 8:39 AM #43207ocrenterParticipant
I’ve always felt the builders have abused the concept of mello roos thru this housing boom. And I hate to say this Bill, you and your fellow buyers allowed the builder to abuse it and took it as a previlige.
Back in 2000-2001 mello roos were uniformly 0.1 to 0.2% on top of the property tax. what was the price of homes then? 50% of what it is currently. So Bill, assuming your Moorpark home was purchased for $1 million. Back in 2001, your mello roos would have been 0.2% of $500,000 = $1,000 per year, or $30,000 over 30 years.
By 2005, all of the mello roos out there in SoCal jumped to .5% or even .8% of the purchase price. Assuming your $1 million dollar home had a .65% mello roos rate, that gets you $6500/year and $200,000 over 30 years.
Did the price of asphalt, power lines, sewage pipes, and illegal Mexican construction workers increase by 666% over 5 years? NO. So why did the mello roos rate increase by 666% over 5 years? And why did homeowners allow the builders to do this to them and say “thank you for the previlige of paying for this, may I have another?”
things for you and your fellow picketters to ponder this upcoming weekend.
January 11, 2007 at 8:53 AM #43209Cow_tippingParticipantBooo hooo hooo … my neighbor paid less than I did … STFU.
You are an FB, you are a GF, you simply put paid $100 a share for Pets.com and webvan and anticipate it will rocket to $200 a share. You have not looked into the history of crashes and seen this comming 100 miles away. Its time to own up and let the houses fall into forecloseure … its not like you ever intended to live there very long. You were going to sell it off after it rockets up … so execute that plan. The fact that it didn’t skyrocket, minor detail, its the bank that takes that hit …
Cool.
Cow_tipping.January 11, 2007 at 10:43 AM #43230blackboxParticipantWow, you guys took a $200,000 haircut! Not $150K. Geez, add that with the scarlet letter of being a mello roos property, which will add $100K on the lowball offer, and you have lost $300K on your home overnight. I suppose you want home developers to continue funding your extremely bad decison to buy at the peak of the mother of all housing bubbles! In two years, your property will have a 50% haircut, and you’ll be a renter again, with a little less money, and a screwed up credit record. Just because you did not want to miss the train. It was a great time to buy….for the developer, the salespersons, the loan officers, and the constuction dudes. Too bad you didn’t stop and think ” Gee, how can people on an average income afford today’s prices. Maybe I should look at historical income/home prices ratios to determine if a home is overpriced.” You probably thought building land was running out, and that the Oxnard area is very, very special. Well, OOPS. Hey someone bought Yahoo at $120, $100, $90, $80………… So welcome to the real world again…. Homeowners. Pull up a chair, grab a beer, and our complementary popcorn. We’ll give you a big hug right after we give you a slap behind the head. YOU BONEHEADS!
January 11, 2007 at 11:06 AM #43231bigtroubleParticipantHey now, lets be fair. A McMansion can hold a lot of Beanie Baby’s.
January 11, 2007 at 11:16 AM #43234IONEGARMParticipantGood to see that schadenfreude is alive and well.
January 11, 2007 at 11:21 AM #43235lendingbubblecontinuesParticipantBlackbox-
Couldn’t have said it better myself AND thank you for saying it!
Non-sequitur, but relevant: Any guesses why you are supposed to clench your buttocks tightly before entering the water from a high cliff jump?
These guys in Moorpark are about to find out!!
LBC
January 11, 2007 at 11:33 AM #43242ocrenterParticipantIt isn’t schadenfreude. Seriously, why did buyers ACCEPT a 666% increase in mello roos over a 5 year period? They didn’t just take it, they said thank you and let me refer my friends and family.
same with San Elijo Hills. The mello roos + property tax was a flat 1.75% of the purchase price in 2002. But in 2006 when prices of homes tripled, the mello roos + property tax was STILL 1.75%. San Marcos property base tax is 1.25%, so let’s just look at the mello roos of 0.5%. In 2002 a 2500 sqft home went for $300,000, meaning a mello roos of $1500/year or $45,000 in 30 years. In 2005 that same 2500 sqft home went for $800,000, meaning the mello roos became $4000/year or $120,000 in 30 years. If mello roos TRULY was meant to pay for infrustructures and schools, that price SHOULD NOT CHANGE between 2002 and 2005. But it did. In this case a 266% increase in price tag within 3 years.
There is really never in history where folks were willing to sit down and agree to such DRAMATIC increases in taxation over such short amount of time.
By virtue of the builders having the ability to just take these mello roos away just like that, you know these DRAMATIC price increases in mello roos over the last few years were simply builders taking advantage of the buying frenzy.
Ionegarm, if you sit down and look at things from this prospective, this is not schadenfreude at all.
January 11, 2007 at 12:16 PM #43249DanielParticipantDear William,
Although I’m sorry for your situation, I have to say that, like many others here, I don’t think Pardee has done anything wrong. In my view, Pardee has simply decided to reduce the prices of their homes by about $75K (in today’s dollars). They could have done it in many different ways: simply reducing the list prices by $75K, or offering incentives worth the same amount, or offering to pay for Mello-Roos taxes, etc. $75K is $75K any way I look at it. You seem to feel otherwise. Would you have been more satisfied if they simply reduced the list prices by $75K?
Regarding the William Lyon example, they didn’t just do “the right thing”, they went well beyond that by giving previous buyers their money back. Should the market have gone up since Phase 1, I don’t believe they would have asked the previous buyers for more money, right?
I was in your shoes in 2005. I had signed up early for a Pardee development in San Diego, at a time when the interest lists were miles long. I was offered the “privilege” to buy a house, and even paid a $15K deposit to reserve it for 72 hours. When my 3 days were up, I politely declined to sign a contract, to the amazement of the sales team (they of course found another buyer down the list in the next 5 minutes). I could have very easily afforded the house, but I chose to walk out. You chose to stick with your purchase. I believe it’s only fair that we live with the consequences of the decisions we made.
Daniel
January 11, 2007 at 12:34 PM #43251IONEGARMParticipant“Ionegarm, if you sit down and look at things from this prospective, this is not schadenfreude at all.”
If you sit down and look at the joy people are taking at other peoples loss, it is the definition of schadenfreude.
You can agree that there is a bubble and that some people are now paying for the their mistakes participating in it, but there is a bit of glee that is showing for some around here in regards to it..
January 11, 2007 at 12:46 PM #43253BobbyDParticipantNot only has the builder abused this but also have the city and county. The builder passes the costs on to the buyer and city and county happily have taken the increased tax revenue even though, as you pointed out, the infrastructure cost basis has not increased proportionate with the home prices. And as many of you have pointed out, the buyers were enablers and willingly paid and allowed it to happen.
To my knowledge, unfortunately there is no mechanism in place to curtail this abuse by the builders/city/county. And they will continue to do it and get away with it as long as the market will bear it. As has been demonstrated previously in the 80s/90s and again today, builders will either pass on the mello roos or absorb it based on the state of the market and a buyer’s willingness to pay it. We are in need of real estate tax reform!
It is apparent that Pardee is not selling these homes at a loss and has enough margin to cover the $150K or $200K in mello roos and still turn a profit. Otherwise they would not do it, they will act in whatever manner best serves their financial interests.
Bill, I am no mello roos expert, but my understanding was that you always had the option to pay all of the mello roos up front and it should have been made available to you. I do not know the legalities or regulations around this. But you and the other buyers should look into it. Track down all of the filings for your Mello Roos assessment and the fine print. Pardee and/or the city and county may have acted illegally or bent the rules to best serve themselves. You should further peel the onion.
BD
January 11, 2007 at 1:05 PM #43255PerryChaseParticipantYes, Bill, peel the onion further and if Pardee or the localities acted illegally, they should be made to account.
OCrenter, BobbyD, it sounds like the local officials are all in the pockets of the developers. By working the Mello Roos, the localities created another way for builders to pass development costs onto unsuspecting buyers. I also think that HOAs are also a way to shift costs onto the homeowners. All the while, governments at all levels become more and more bloated. If we, the citizens, are going to pay for everything directly, we need to work to cut government in one-half once every 10 years.
With the proliferation of HOAs, I wonder who will pay for all private road repairs 30 years from now.
January 11, 2007 at 2:22 PM #43261BobbyDParticipantPC, I would agree with you. HOA is another way for the builder to pass the buck on to the home buyers. Professional HOA mgt companies have also become a lucrative cottage industry.
I am not sure that I would call the home buyer unsuspecting however. Although some certainly are and will learn the hard way. But, I am as guilty as the next guy, we have all allowed the market to evolve this way. I could not agree with Daniel more, we all have choices to make and you have to live with the consequences of them.
We all have different circumstances in our lives and buy or sell based our own specific situation. Whatever decisions you make, do your homework, and then be prepared for the risk and reward that goes with your choices.
I am still recovering from my losses from the tech stock bubble, but I learned my lesson and will not make that mistake again. Do I think that we were all scammed and screwed by the VCs and investment banks, who manipulated the market? Yes I do, but I am the idiot who drank the koolaid and bought Qualcomm at $400/share. So I will continue to lick my wounds and live with my decision.
That is why we all come to this site to learn from one another and share information in order to make more informed and better choices in our decisions.
January 12, 2007 at 2:01 PM #43289North County JimParticipantIn my view, Pardee has simply decided to reduce the prices of their homes by about $75K (in today’s dollars). They could have done it in many different ways: simply reducing the list prices by $75K, or offering incentives worth the same amount, or offering to pay for Mello-Roos taxes, etc. $75K is $75K any way I look at it.
Exactly Daniel. This is not that hard to figure out. Pardee needed to cut prices and decided paying the MR was the best way to do it.
On a certain level, Pardee did the earlier buyers a favor. With a straight price cut, these would become the new comps, undoubtedly putting some of Mr. Busch’s neighbors underwater. With the MR discount, it’s a lot less transparent to a prospective buyer.
January 12, 2007 at 2:26 PM #43333Cow_tippingParticipantThey are complaining that MR had to be financed … and not paid off … but yea … like any one of these flipping idiots were willing to bite it for 50K straight up.
Cool.
Cow_tipping. -
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