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February 28, 2013 at 10:29 PM in reply to: Costco Aetna Health Insurance now available in CA #760243
bearishgurl
Participant[quote=earlyretirement]BG.
Oh NO doubt these kinds of shenanigans have been going on a while. But at least during the depths of the Great Recession you didn’t see them so aggressive like now. And there was not really this sense of urgency by these people that not so long ago recently defaulted to buy a “new home”. And I guess since there is not much pre-existing inventory in many cities the new stuff is their only route to home ownership again.
And now the builders are eating their cake too. They’ve been able to strip out many of the upgrades and people are paying more than ever to get all these “upgrades” where during the bubble it seemed like they almost had to include many of them. They are charging them a fortune. I’m not sure if you saw that Wall Street Journal a few weeks ago about people spending hundreds of thousands of dollars in upgrades. I believe they used one couple in Irvine as an example.
The more things change the more they stay the same……[/quote]
Builders were ALWAYS aggressive in bending over backwards to qualify prospective buyers with their “in-house” lender. These same prospects would have no doubt been sent packing by a direct (conventional) lender or reputable mortgage banker.
I’m not so sure about the integrity of most mortgage brokers. They were a HUGE part of the problem in causing the “crash” of ’07/08 and beyond.
As for “upgrades” being included in new housing, if it is marginally qualified or unqualified buyers who are no longer able to get them … my take on that is “beggars can’t be choosers.” I don’t know the inventory levels of the resale market on the east coast (where the buyers in the WSJ article were) and I couldn’t read the rest of the article because I don’t have a subscription. HOWEVER, SD has PLENTY of inventory below $400K and THAT is the market where these newly-minted post-foreclosure/SS buyers should be shopping in . . . that is, IF their FICO score has recovered enough to obtain financing.
In CA, those “marginal” buyers have no business shopping in new home tracts with their attendant HOA dues and (now very high) MR, IMO. A combination of those monthly expenses plus PITI was likely what got them into the mess they just “semi-successfully” crawled out of.
Again, beggars can’t be choosers. These “buyer-hopefuls” need to lose their burning desire for the “luxury” neighborhood they couldn’t afford then and can’t afford now. It’s time to start over.
Spring Valley and Lemon Grove beckon :=]
Participant[quote=dumbrenter]this plan is for poor people[/quote]
I get the qualifications for Federal help to pay their premiums but what I DON’T get is how the average “poor person/family” is going to pay nearly $13K out-of-pocket if one of them just happens to land in the hospital.
They’ll just end up getting a medical judgment lien against them. If they don’t own any property, it will prevent them from ever buying any.
Medical providers are notoriously aggressive in collecting unpaid bills.
So what’s the point? Right now, CA hospitals can’t refuse to treat the uninsured. If they don’t qualify for Medi-Cal, the hospital seeks “charity care” for them to pay some or most of their bill and then usually writes the rest off.
The “poor” who have no aspirations to buy RE don’t really care about their credit ratings.
All the “CoveredCA” program is going to do is “spread the pain” of the low-income chronic medical-care users (not necessarily “sick”) among the carriers who currently write policies in CA, who will in turn raise the premiums (again and again, as in the past) of their current individual policyholders who are “grandfathered” and thus “trapped.” The vast majority of these policyholders had to “medically qualify” for their policies.
“Poor people” have no business using HDHP’s, IMHO. But the only other alternative is to issue them more comprehensive plans similar to the Kaiser HMO model but “ration care” for them and who would decide what to ration? It’s a slippery slope.
Participant[quote=earlyretirement]Read the article and notice the trend now.
http://online.wsj.com/article/SB10001424127887324338604578327982067761860.html
People that declared bankruptcy as late as 2008 and that were planning to buy a townhome for $200,000 to $250,000 which was their budget. What did they end up buying? A new home for $426,000… “far more than their budget”.
Or the other lady that paid 10% more than her budget.
“It’s much easier to buy a new home than an old one,” said Ms. Riley, a 41-year-old mother of two who works as a case manager for children with developmental disabilities in Alexandria, Va. “The builder’s whole attitude was, ‘No worries.’ They help you and they trust you. They really, really want you to get approved.”
My favorite part! “No worries!” “they help you and they trust you” “they really really want you to get approved”.
Gee, where did we see see this before??? LOL.[/quote]
ER, these shenanigans have been going on in builder’s offices since the dawn of time ;=)
Builder’s “in-house lenders” had a plethora of exotic ARMs and I/O products up their sleeves, lol, and liberally applied “builder participation” in the form of taking out second and even third TD’s so Joe Q Working-Class Buyer and his family are able to pay way too much for their cheap, substandard sh!t on substandard lots in CA’s Lizardland and former farmland. That’s how the masses of unqualified buyers got “approved” to buy a new-construction home during the millenium boom and even decades earlier than that.
Nothing has changed because our PTB like it the way it is. A few of our lofty “elected officials” even had season tix for professional football/baseball for YEARS in the skybox for them and their families to enjoy, courtesy of Big Development!
Virtually NONE of these buyers could qualify to buy a “mainstream” 3/2/2 property on a 6-7K lot under traditional qualification guidelines (80/20 conv) from a bona-fide individual seller with equity . . . no, not even in their hometown of Compton! Hence, all the billboards put up in their home turf luring these unsuspecting “hopeful” renters out to the IE to tour “model homes.”
Why did builders pander to the working poor? Because no buyer with a decent downpayment and FICO score would buy that sh!t and certainly not move from a superior location to a vastly inferior one. IOW, the “creampuff” buyers had “choices” in life.
This is just one example of what happened all over the state in the last decade.
Somehow, these “crooked” builder’s offices just made it happen for everyone who walked in with an SSN/EIN (or a pending application for one, lol) and could fog a mirror and now we are living with the results of their debacle of this mass “social experiment” where square pegs (the poor or near poor) were “modified on paper” to fit in a round hole (homeownership).
All this accomplished was to cause most of these new “owners” to fall behind on their property taxes the 1st/2nd year of ownership, due to monthly HOA dues and/or high MR. Then, exploding interest-rate mortgages 3+ years after purchase caused them to fall behind on their mortgages and we all know the rest of this story.
By then, the builders had long ago picked up shop with their profits and split town :=0
The common builder practice of “qualifying the unqualified en masse” is really disgusting to me. The many-faceted damage they caused to the existing surrounding communities of their cheap crammed-together stucco boxes will last for decades.
I think it’s well past time for CA’s former tract-slum builders (the ones who are still solvent, that is) to head for the Big Sky where they can try their tactics out on Montana’s knarly, crusty PTB. I’d be interested to see how far they get with ’em up there :=]
Participant[quote=craptcha]You replied to NSR. I am not looking to buy a SFR at the moment, I added to the existing house instead.
I doubt there are many pending foreclosures in 4S at the moment and there are exactly 0 non-contingent SFR’s with the asking price of $800K or less.[/quote]
I see that now, craptcha. My bad. But my post still stands for any Pigg who is lining up at the trough with their peers to upbid listings in highly encumbered newer tracts within a school district (PUSD) that could easily go bankrupt on your watch.
There would have been and should have been more traditional listings in Foreclosure Ranch by now if not for all the latent squatters who are still looking for a bailout and their lazy lenders who are presumably “running the show.”
You were probably better off adding the space you need instead of looking for something bigger in this environment, craptcha. And hopefully, you will be able to recover the total cost of your remodel upon sale, whenever that happens.
Participant[quote=SK in CV][quote=bearishgurl]
I’m curious, SK. What did builders want to know from the results of your project? And, if any of them learned that SD (or CA) was “overbuilt,” did they then leave the state in search of buildable land as a result of your report?[/quote]Essentially they wanted to know probable absorption rate for new housing based on a gazillion assumptions. Three of the four that contracted for the work paid attention and removed work from the pipeline primarily after 2007 and stopped buying land inventory. And one is bankrupt.[/quote]
This is all good to know. As it should be.
Thank you, SK!
Participant[quote=SK in CV] . . . I guess where we really differ is how much the CFD’s contributed to the problems. Surely if the homes hadn’t been built, it would have been a non-issue. But it was the lenders making all those loans. And the builders facilitating. Should the cities and municipalities that approved the CFD’s known what was going to happen? In hindsight it looks pretty obvious. But in 2000-2004 when many of them were approved? I don’t know the answer to that. By the end of 2004 I was pretty sure that absorption levels were going to be an issue by 2007, and the state would be overbuilt. But I had over 3,000 hours in my project studying it, and it was done for builders, not cities. I’m not sure they should have known just because I did.
That doesn’t mean I don’t think there weren’t foolish mistakes made.[/quote]
Yes, SK, the city/county leaders should have known that their own future finances were at stake in consummating these deals they made with developers. They knew the bonds issued by CFDs were ONLY used for infrastructure. They knew their own employees would have to service the subdivisions within these CFDs. When ChulaV had to start hiring employees (around 2003) they felt “rich” due to all the new property taxes coming in, from which they got a cut. Instead of having someone pay attention as to how these unsustainable bubble prices were being financed within their CFDs, they kept hiring until AFTER their property tax receipts had been severely reduced, due to practically the entire city of market-rate taxpayers qualifying for a reassessment under Prop 8 and a subsequent reduction in their property taxes!
Some of these new employees they ended up having to lay off no doubt stayed the required five years to be “vested.” So now they’ve earned a “pension,” however small.
By F/Y ’09/10, the county assessor had adjusted EVERY county homeowner’s taxes (who had purchased up to about ten years prior, in most areas) in order to prevent them from filing assessment appeals because they didn’t have the staff to handle them.
By this time, it was too late for ChulaV. They conducted massive layoffs after a couple of years of receiving a shorted share of their property tax proceeds and shuttered many of their public counters for one day per week and lunch hour.
In short, Chula V’s leaders were positively giddy over the initial property tax proceeds (for ~2003-2005) emanating from the CFD’s. From there on out, they were asleep at the switch and not nimble enough to realize that that party was dwindling down and soon to be over … with a bang … until of course, after the fact.
We now have more than double the population in ChulaV without the city and county personnel to properly support it.
I believe the last CFD in ChulaV was approved by the City in around 2000. There is a bit of a a time lag between the formation of a CFD and a developer being able have the first phase of a subdivision within it ready for market (2+ yrs?). This is due to the developer having to build a certain amount of infrastructure (shaving hilltops off, bringing in utilities and grading and forming streets, curbs and storm drains, etc) before pouring any pads for homes.
This same sad story could be told all over the state. The saving grace of ChulaV is that it was “coastal” and already had established upscale areas, a longtime established population and was wedged between SD (multiple job centers) and the int’l border, and thus its RE values didn’t suffer as much as they did in other, less well-located cities who approved multiple CFD’s during the same time frame (such as San Bernardino).
I’m curious, SK. What did builders want to know from the results of your project? And, if any of them learned that SD (or CA) was “overbuilt,” did they then leave the state in search of buildable land as a result of your report?
Participant[quote=SK in CV]In 1960, National City and Chula Vista were bedroom communities, unlike most of the newer developments, with their own commercial districts.
My apologies, the “CV” I was referring to as a higher income area was Carmel Valley. I should have made that clear.
Price wise, correct me if I’m wrong, new Chula Vista is all over the place. Everything from starter condos to homes that sold for well over $1M, no?
(and I think you’re jaded by your disdain for “those people” who ruined Chula Vista. I don’t doubt it was as you say, I just doubt that those same circumstances were near as common across the rest of the state as you think.)[/quote]
OK, SK, if you say so, but NC and ChulaV’s commercial districts are quite old (perhaps 50-80 yrs old). Perhaps you and I have a different version of what a “commercial district” is.
Yes, Eastlake Vistas (91915) had a few blocks of ~3000 sf homes built after 2000 which sold new for $600-$700K. The vast majority of them were foreclosed on or sold short. Even though some had been heavily remodeled and landscaped by 2010, the average sold price for that subdivision in early 2012 was about $530K.
Perhaps you are thinking about the over $1M homes build in Eastlake and Rancho Del Rey custom areas by 1992. I could be wrong, but I don’t think there were any like that built after 2000 in the South County.
Yes, SK, the phenomenon of lower/moderate-income families buying into lower-tier new subdivisions happened all over the state.
Tracy, Stockton, Merced, Fresno, Modesto, Paso Robles, Sacramento and surrounds, Victorville, Palmdale, Adelanto, the Temecula Valley, and Chula Vista, to name a few.
This population was only able to buy into these subdivisions because of developer assistance, and, in recent years, were assisted by developer salespeople in signing up for 100% NINA mortgages and PM second trust deeds (carried back by seller/developers and cities).
Obviously, no thought was given by buyers OR sellers reps as to how these buyers were going to afford the HOA/MR and mtg rate hikes for the long haul.
In addition, developers specifically pandered to this population via radio and billboard advertising in select low-income urban and suburban areas of CA.
Had this “recipe for disaster” not been set up for them at the builder’s sales offices, the masses of low and moderate income buyers who became ensnared into buying in these substandard developments would have stayed put.
I blame Big Development for the mess but most of all, I blame the elected leaders of CA’s various cities and counties who gave Big D carte blanche to turn HUGE swaths of CA’s undeveloped land into a grossly-overbuilt eyesore full of “McHomes” . . . that is, after “rolling in the sheets” with them for YEARS :=0
Participant[quote=no_such_reality][quote=bearishgurl]craptcha, if you’re a prospective buyer in 92127/92128, may I ask what’s wrong with the 21 listings that you presumably CAN make an offer on?[/quote]
The fact that there are probably 1000 buyers looking.
This isn’t a market that is in balance. This is a market that is horribly constrained….[/quote]
It’s just as I thought, craptcha ;=0. You’re just one of the many Piggs at the trough trying to muscle your way in to nuzzle for scraps. You’re afraid your offer won’t even get noticed, right?
Well, get a more “credible” agent then, or find another trough. Foreclosure Ranch and surrounds (with its mostly substandard lots and exorbitant MR which will cost you a fortune) isn’t the only game in town. Why don’t you get out of the CFDs and branch out a little bit with your search? Believe it or not, there ARE established areas around there (that the Piggs aren’t fighting and up-bidding one another over) which are no doubt close to your workplace. They have plenty of infrastructure nearby as well, some even moreso than Foreclosure Ranch.
Your search is too narrow. At this rate and with your current agent, you may not be able to buy anything this year.
Participant[quote=SK in CV][quote=bearishgurl]
CA coastal counties were never “set up” in the first place to attract the country’s masses of low and moderate income residents. That’s what CA’s inland counties (and NV/AZ?) are for.[/quote]
I’m pretty sure that no modern city was ever set up to handle more than 2 million people except for Brasília. Cities evolve and adapt. Some better than others.I understand your hate of CFD’s and that process. I can’t argue with you, you know a lot more about it than I do. (Though I think you believe that it is a primary cause of California housing problems, and that can’t possibly be true. If it was, Vegas, Phoenix, and much of Florida wouldn’t have had any problems.) There have been countless mistakes by city planners with respect to CFD’s, but I think blaming the process is misguided. In theory, they still make a lot of sense. It’s the practice that need improvement.[/quote]
I never stated that CFD’s were the cause of CA’s housing problems. I stated several times here that they were the direct cause of CA jurisdictions going bankrupt in recent years or otherwise not being able to pay their bills (with the exception of Mammoth Lakes). By their sheer numbers of housing units built within them, the existence of CFD’s magnified the “boom and bust” nature of CA’s RE market manyfold. When these new subdivisions were all originally purchased into around the same time (with “funny-money” mortgages), these thousands of owners all tended to go down at the same time, taking owners in their entire “sub-region” with them. The non-CFD owners in these “sub-regions” could have had little to do with the cause of the “bust” (didn’t borrow subprime/had little to no home equity withdrawn, etc) but their home values suffered for years, nonetheless.
This is what happened in ’07/’08 and beyond in Chula Vista and other areas of SD County where there had been massive CFD formation allowed to go in adjacent to long-established communities.
[quote=SK in CV]I’m a bit surprised by your elitist attitude. The growth of San Diego during the 2nd half of the last century was driven by median income homeowners. They filled Clairemont and created the commercial district in Kearny Mesa, and then Allied Gardens and later San Carlos, as well as the bedroom cities of Chula Vista, National City, La Mesa and Lemon Grove . That wasn’t an accident. It was by design, to attract moderate income homeowners.[/quote]
Actually NC is 3-6 miles from dtn SD (top to bottom) and western Chula Vista is 7-13 miles from dtn SD top to bottom. These aren’t “bedroom communities.” As you know, they are right on the bayfront. They are closer to dtn SD than any of the other communities you mentioned.
In those days (’40’s thru ’70’s), SD HAD to attract “moderate income homeowners.” The city had plenty of production and mechanical (blue collar) positions to fill in local companies which had ongoing contracts with the military.
Except for NASSCO, SW Marine and Kelco on the bayfront, those positions are now long gone.
[quote=SK in CV]You can argue that many of the newer developments in the last 30 years in Chula Vista, in the north county coastal cities, in north county inland in RB & Poway and PQ targeted some higher end buyers, but none of those areas were exclusively higher end (with the exception of CV). RB if you recall, was originally planned as a retirement community. That pretty quickly fizzled, but if I remember correctly it included the first PUD in the state.[/quote]
I don’t know a lot about the early residents of other areas but, actually, most of the new construction in Chula Vista did NOT attract “higher-income” buyers. It attracted low and moderate income buyers. During the era of NINA lending, it also attracted all manner of “phony” buyers, including straw buyers for agents/mortgage brokers and non-US citizen-buyers who somehow successfully availed themselves of NINA financing. When the owners within these CFD subdivisions “crashed” all at once, it created a VERY dysfunctional RE market …. for EVERY owner within a ten-mile radius.
[quote=SK in CV]You can whine about growth all you want. I grew up in San Diego. I remember when there was almost nothing but cows in Mission Valley. And where Fashion Vally Mall now stands, there was a brand new 8,000 seat baseball park. A lot has changed since then. But San Diego and other CA coastal cities aren’t attractive to people as a destination by accident. People WANT to live in SD. You can’t keep them out unless your goal is to drive major employers out. And that bus left a long time ago.[/quote]
New residents can and will come, SK. But we no longer have the social-service infrastructure and funds to “bail them out.” They have to buy or rent something they can afford for the long haul or stay where they are. SD County and its cities are not obligated to provide “new construction” or low-income housing on the beach or anywhere close to it for newcomers.
A lot of the “population influx” in SD’s South County in recent years did NOT pay their own way. Not only did they get NINA mortgages and cry how unfair they they were “treated” by their lenders (after “squatting” for months/years), they enrolled their kids in the “free breakfast/lunch” program at school, used low-cost (subsidized) HeadStart and YMCA childcare, got CA cell phone and home phone subsidies, and, after losing their homes to FC or SS, filed applications for TANF and EBT cards and used South County’s 2.5 assigned domestic judges for their divorce case :=0. The list goes on.
From what I’ve seen, the lower-tier “new construction tracts” (many PUDS with “zero lot lines”) attracted locals and newcomers who wouldn’t otherwise have purchased here, were it not for developer incentives and buy-downs and the ability to get in for “no money down” or, as in the past, with NINA mortgages.
Chula Vista would have been much better off if they hadn’t approved any new CFD’s since 1992 (Eastlake Greens) and just left well enough alone. They’re now struggling mightily with about 60% of the employees they had in 2005 and there is no relief in sight, due to having its population nearly triple since 1992.
Chula Vista’s PTB did it to themselves but ALL residents bear the brunt of their bad decisions.
Participantcraptcha, if you’re a prospective buyer in 92127/92128, may I ask what’s wrong with the 21 listings that you presumably CAN make an offer on?
Participant[quote=craptcha][quote=bearishgurl]
I realize that a good portion of these listings (20-25% ?) are “contingent” SS’s but I am failing to understand why so many prospective buyers are claiming there is “nothing to buy” due to “low inventory.”Could it be that they THINK they need dozens of properties to consider before making an offer on ONE home?
If so, that’s complete and utter BS, partly fueled by agent/broker incompetency.
[/quote]
92127 has 9 non-contingent SFR’s under $800K. 92128 has about a dozen once all age-restricted areas are removed. Three years ago we had more than 100 houses matching the same criteria.[/quote]
And the problem is . . .?
Participant[quote=no_such_reality]Because if 1% of households wants to buy house or investment property, that’s 11,000 needed sales.
We have 5000 on the market.
see a problem?[/quote]
No, I don’t see any problem, nsr. With 7200+ local MLS listings on the market (a portion of them now listed for over 90 days), these “local households” who want to buy a residence or investment property need to get out on the street and get busy.
Time to make a deal.
Participant[quote=spdrun]Some buyers will drop out and wait it out, or buy investment property in another state. Other houses will be short sales, where the seller will take the first offer likely to stick. 5000 houses. 11,000 buyers. That still leaves a 45% chance of a buyer matching with a seller. Get to it.[/quote]
It’s actually 7200+ current listings on the MLS, but good advice, spdrun!
Participant[quote=no_such_reality]I define affordable housing as pretty much anything sub-million. Not affordable as in low income. As for not having a high volume of sales, that is a peculiar SoCal thing, we have very high population and very low housing sales. When saying we need 7000 a month, something SD has never come close to, I’m talking to have the kind of fluidity in availability of housing that will keep from what you’re seeing happen.[/quote]
For a CA coastal county, I would define “affordable” listing inventory as priced under $400K. ALL CA counties have a “low volume of sales” irrespective of their populations. There is less mobility and deed-transfers (NOT one and the same thing) in CA than other states due to Props 13, 58 and 193.
Buyers looking for a principal residence in a particular price range who are purchasing with a mortgage don’t need “fluidity,” whatever the h@ll that is supposed to mean. They need to purchase an acceptable roof over their heads under the direction of a very competent agent/broker. ESPECIALLY in the current RE climate.
[quote=no_such_reality]I’m talking what kind of volume of listings and sales a county like SD needs, with 3 million inhabits and a million+ household units to not have what amounts to chronic scarcity. At the moment SD county has about 5400 listings. Less than 0.5% of the housing stock is for sale.[/quote]
SD has 7200+ current listings which are posted on the MLS (see my sdl link in a prev post). There are no doubt hundreds more which are NOT currently posted on the MLS.
[quote=no_such_reality]Again, as for Marin or SF county, most people residing in Marin, don’t make their living in Marin. As for SF, they’re having some real problems with traffic jams OUT of the city in the morning as the youthful workers working in silicon valley and living in the city.[/quote]
It doesn’t matter. The residents of these counties, if “worker bees” in a county which is not one of the three, will do a “reverse commute” to an adjacent county to work. All three of these counties have large populations of retirees (yes, even SF). Those “youthful” commuters from SF to Silicon Valley can take the Caltrain instead of the (congested) US-101/I-280 to dozens of major SV firms (almost door-to-door in many cases).
[quote=no_such_reality]As for not building, that would be interesting. But, I really doubt the population will stop coming. In fact, I think not building and not providing adequate housing will actually have the opposite effect that you desire, actually increasing the amount of low and poverty level inhabits. They’re use to living in substandard conditions where-as mid-high level incomes know they can have more.[/quote]
This (incoming) “population” can and will continue to come. They’re welcome to buy one of the 7200+ properties currently listed on the local MLS or rent. If it gets down to 3600, 2400 or 1500 or less in the future (like what happened in those MLS’s in the Silicon Valley) they can buy one of those or rent.
I don’t agree that having a moratorium on building will create poverty in SD. It will actually eventually have the effect of enhancing current property values. We don’t have very many houses with “substandard” living conditions here, due to stricter building codes and “rental-habitability laws” than other states. It’s not that kind of a city. In addition, SD has never had any “public housing projects.” There really is little, if any, actual “blight” in SD, compared to other US cities. These “low-income and poverty-level inhabitants” you speak of are already here. Most of them have section 8 and other housing program vouchers and have resided in their current rentals for over ten years. They’re doing fine and aren’t going anywhere. They’re also beginning to occupy CA’s (now “busted”) exurbs to a MUCH GREATER DEGREE than its coastal cities.
Whether or not any new construction tracts continue to be released, “mid-high-level-income” incoming buyers (whatever that is supposed to mean) will continue to buy whatever they can afford in SD Co. If mortgage interest rates go up substantially, they will buy much less (if they want to live closer to work in SD County). If they think they “have to have more,” they will buy in another county (such as in Temecula and surrounds) and commute to their jobs in SD County.
That seems to be what it’s there for :=0
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