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August 30, 2015 at 3:39 PM in reply to: Why I FIRED my listing agent: My Listing was a Lemon! #789035
bearishgurl
Participantmixxalot, here’s a search link for you for East SD County. Some of these homes are in pretty good shape but only the first 12 listings (priced low to high) are listed at less than $500K.
In addition, 5 out of the first 12 listings are “short-sale” listings, meaning their lenders may not accept an offer under $500K (or anywhere near what the wishful seller and their agent) are hoping they accept.
Participant[quote=mixxalot]I see a lot of wild speculators from China driving up markets in California especially in Irvine, San Francisco, Los Angeles and Palo Alto. Inland is much less expensive for example same house in Point Loma or Del Mar can be bought for half price at like 400-500K versus 2MM. If you are willing to live 20 miles from the beach that is. My goal is buy a cheaper inland property for 500K and have a fun sailboat in a nice marina and be able to enjoy both worlds.[/quote]
mixxalot, your idea is doable, especially if you already own your sailboat and don’t have to buy one (new or used). There are a couple of things you should bear in mind, however.
In SD, a slip for a 30’+ sailboat costs over $700 month.
In SD County, you CAN find a property in Lakeside, EC or Esco (20+ mi east of the ocean) to trailer your 30+ foot sailboat to and park it on the premises. HOWEVER, these properties will very likely cost you at $575K++ unless you’re okay with buying a very heavy fixer and rehabbing it as time and money permit. There are a few of these properties still out there but they are getting further and fewer between.
And don’t forget to factor in at least an additional $750 year for A/C for the hot months as well as any additional daily commute time (and gas) those locations create for you.
If I were you and had this goal, I’d look for a place I could park my own boat/RV ASAP (with at least a 15 x 40 extra parking space (at a minimum and preferably behind a fence). They aren’t going to get any cheaper … regardless of condition. You don’t want to be at the mercy of boat slip rent hikes out on the bay while simultaneously having to pay monthly homeowner-related bills (which you are not yet paying?), IMO. After you get your *new* place livable, THEN you can buy that sailboat (if you don’t already own one).
I sound a bit like Suze Orman here, lol …. :=0
Participant[quote=Happs]bearishgurl: What % of assessed value do you think is fair? Do you think the % of assessed value should be progressive based upon worth? For example, should a $300,000 house be taxed at 1/2 of 1% of $300,000 and should a $3,000,000 house be taxed at 1.5% of 3,000,000?[/quote]
I’m okay with Prop 13 as written except for the owner’s ability to turn their long-owned property with their ultra-low assessment still intact into rental property and the law’s application to multifamily properties and commercial buildings. When an owner applies to the assessor to have their tax bill mailed to a different address and/or places their HOEX on a different property, then that date should trigger an automatic reassessment on their old principal residence. I’m not sure yet how much of a percentage of the old bill it should be or what formula to use on this. I think the ad valoream portion of a CA property tax bill (the 1% portion of the purchase price + 2% per year) is “fair.”
I’m NOT okay with the transfer-ability of an owner’s old assessment to a new owner (even if that new owner is a child or grandchild of the old owner). All transfers of title should trigger reassessment at an assessor-appraised figure if the transfer was not at arm’s length and its corresponding deed states the property was “sold” for $250 or $50K or some arbitrarily low amount. If the “buyers” don’t think the assessor’s appraisal is accurate, they can go through the assessment appeal process, just like all property owners in CA must do.
I think if the voters were actually educated (via TV/internet/mailers, etc) as to WHO benefits the most from Props 58 and 193 (large scale slumlords, comm’l property owners and old-money families who own multiple `trophy homes,'” etc) and were made aware that owners of 1-4 units are allowed by law to turn their ultra-low assessed properties into rentals and keep their old assessment, those two props alone could get enough attention to get repealed. The vast majority of voters are simply ignorant of these lesser-known “loopholes” in state law.
These measures were both passed in the mid-eighties but it took at least 15 more years for CA state and local governments to begin feeling the ramifications of too many properties still receiving ultra-low assessments and thus their owners paying ultra-low taxes on them.
If Props 58/193 weren’t in place, the first group of ultra-low-assessed owners who originally benefited in 1979 from Prop 13’s rollback to September 1975’s assessment (likely 98% of them born prior to 1955) who still owned these same properties would all eventually die off and thus Prop 13 would become moot. And multifamily/commercial owners would have not been able to transfer title their their property to a Corporation, REIT, or partnership that they were part of and still be able to keep their ultra low assessment. They would have had to keep the title in their own name and operate it solely with their own capital and/or borrowed funds if they wanted to keep their ultra-low assessment.
Rents would NOT be higher in CA (in both residential and commercial properties) if Props 58/193 were not in place. Rent is set by the market and in the absence of rent control, all LL’s attempt to get as much rent as the market will bear (and still retain the best quality tenant they can get). The amount of their assessment has nothing to do with it.
Family farms, other Ag (and wineries, to a lesser extent) should be taxed at .005 to .008 of the assessed value of the property if Prop 13 did not exist. If any state or Federal Ag exemptions exceed that tax savings, these owners are welcome to apply for it. Whether this type of property’s title is transferred or not should have no bearing on the formula used to assess it as long as the property continues to be used solely for Ag purposes. If the current owner decides to sell the property to Big Development, their property should be reassessed effective July 1 of the YEAR PRIOR to the transfer of title out of agricultural use. This will prevent farmers and ranchers from negotiating all year with developers (whether or not they are still farming the land) and then scheduling the closing just before June 30. This will also prevent “middlemen” from transferring title from a farmer/rancher/winemaker to themselves close to June 30 (end of the tax fiscal year) and then having little to no property tax liability for the (brief?) period they owned it.
ParticipantAs I stated before here, NSR, yes, I do believe it is a “game changer” for a longtime owner to be able to now fetch $1.2-1.8M+ for a (now dated and rundown?) home they paid $30-$70K for between 1955 and 1970. Of course, it is better to have that cash in hand before you die than fooling around trying to collect rents from marginal tenants (who would be all that would apply to rent it in its current shape). A costly rehab probably even looks daunting to “heirs” (of Saratoga properties and similar around the state) when the cracked and broken concrete alone (front, side and back) could cost $65K+ to replace all by itself. That doesn’t include the cost of replacing the massive wood roof and tearing out 1/2 AC of unkempt landscaping and replacing with drought resistant plants and drip irrigation.
And we haven’t even stepped inside the house yet to see what else it needs :=0
ParticipantThere has been three “heirs” (that I know of) in my immediate area over the last 3 years who spent 2-4 months rehabbing the interior and exterior of their deceased relative’s home and promptly placed tenants in it. In all cases, the taxes were less than $700 year and those low assessments passed to the heirs.
Participant[quote=no_such_reality]At that price point, the rental value exceeds the sale value. It’s about at the tipping point though. At that price point (outlined in the other thread), a new buyer can’t really purchase it with anything over 50% financing and make a return on capital after paying the stepped up taxes and costs. The net result, the homes change hands to new owners, not landlords.
As the price goes up, the rental value doesn’t keep up and the houses tend to resell and revamp instead of refurb and rent.
As another pointed out, rental market above certain amounts thin out quickly.[/quote]
I see your point but I thought most buy and hold investors today purchased their investment properties with all cash. Do you see small investors taking out purchase-money mortgages for a 1-4 unit investment property?
Participant[quote=no_such_reality][quote=bearishgurl]I forgot to add that a large portion of the driveways in Saratoga are asphalt and many of them in the listings I saw (even the concrete ones) are full of cracks. A (concrete) driveway of that size costs about $25K to pour today.[/quote]
I’ve being seeing that for three years in my neighborhood. Homes that have been owned for 40 years go up for sale at near market. they eventually come to reality and sell about 10-15% lower to one of the many investor flippers (last one I talked to had five investor offers first day. It then comes off market for 1-3 months and back on the market about 20-25% above their original listing.
I’ve watched home after home after home change hands.[/quote]
Where is this, NSR? Based upon your posts, I thought you lived in a newer area, with MR.
SD areas with “garden variety” 1940-1960’s tract homes don’t seem to turn over much (where the resale value might be $300-$600K). Perhaps this is because their owners have fewer choices in life and need to live there until they die (or until they can no longer take care of themselves).
Participant[quote=urbanrealtor]Per my Aunt (broker of Cassidy Real Estate in Los Altos):
“Pretty easily. Depends on location of course- does it back to highway 85?”
Apparently, backing on to 85 is bad for value.[/quote]
UR, I only saw one listing that was within a block and a half of the 85/Jct I-280. The rest were far enough away not to get the noise and traffic exiting on and off. But right in town (95070), I had a filter on for one-story ranchers, only. Obviously the 85 was always there, albeit probably a two-laner when these homes were built. Of course, the I-280 was not there and IT is the sole reason for all the traffic around there now.
I also saw online 2-3 gems on/off “Pierce Rd” leading to the Mountain Winery. IIRC, they all were situated on 1 AC+ lots and needed work but two of them needed quite a bit of work. I didn’t include them in the above description of listings because they were not one-story ranchers. They were a partial two story or had “walk-out basements.” All early ’70’s, IIRC and listing prices crept up to +/- $2M. The (long) decks that were replaced by Trex were in good shape, as I recall. They had awesome westerly tree-filled views over the foothills with a sliver of the (distant) ocean. Drinking your morning coffee on a deck like that with the fog rolled in almost every morning would be an incredible experience, methinks. This area is 20x better than the dry desert that is the Hollywood Hills (LA) and 10x better than darkly-forested Mill Valley facing Mt Tam and the ocean, IMO.
Saratoga is SUCH a fabulous area for retirement (if you already bought a place back in the day and still own it)! I guess all those old-timers that are deciding to list there now are now either now alone or just physically can’t take care of their property anymore … or both.
ParticipantI forgot to add that a large portion of the driveways in Saratoga are asphalt and many of them in the listings I saw (even the concrete ones) are full of cracks. A (concrete) driveway of that size costs about $25K to pour today.
ParticipantQuestion for the Piggs: Would a weed-filled vacant lot of 1/3 AC in Saratoga, CA and zoned R-1 be worth over $1M today?
ParticipantI’m now very interested to see how this “tug of war” between buyers and sellers in Saratoga ends up playing out! Saratoga IS the best town in SV (it’s not really IN SV but adjacent to it). It you’re looking for a sprawling rancher, no other SV city can compare to it.
It has (one of the) best quality of life in the nation, IMO.
Participant[quote=bearishgurl]livincali, I don’t see a proliferation of “dated properties” (SFRs) flooding the market at any one time, ever. I believe those owners of “dated properties” who succumb to reverse-mortgage lenders are far and few between in SD. The majority of senior citizen-homeowners in SD County have more pension/SS monthly income than they can even use, due to many thousands of them collecting pensions and survivor benefits from the VA and CSRS/FERS/SDCERS/SDCERA + SS. Tricare for Life charges military retirees and survivors very little in monthly premium (and no copays except for a small copay for brand name drugs) for their Medicare Part B and D coverage. SD at one time was a city/county populated by predominately government workers and military and a good portion of those senior-homeowners (now retired) are still alive and not going anywhere …. nor will they ever need to take out a reverse mortgage, IMO. . . [/quote]
Okay, well I’ve got my SD Co plat maps now and will endeavor to work on them on Sunday. But I’m going to have to retract my statement above as it applies to some NorCal zip codes. I just spent an hour+ perusing single family home listings in Saratoga, CA (Santa Clara Co) which I have not done in about 3 yrs. My search criteria was simply a SFR, 3/2/2, one story with a fireplace. 95070 has always been one of my fav zip codes :=))
There are quite a few listings currently on the market in 95070/71. Over half of the listings I looked at were assessed at $75K to $95K but nearly ALL OF THESE were asking $1.2M to $2.8M. Average lot size was about one-third AC and there were several lots much larger. House SF was about 1600 to 2800 (avg about 2250 sf). Year built was 1955 to 1970. None of the listings had any (legal) additions which added to the footprint (or the assessment) of the property. I didn’t take any notes, but based upon my memory, market time was 1-68 days with about 1/4 “pending” and maybe four which appeared to be relists (BOMKs) with 2-3 of those with slight price reductions.
Okay, now for the general condition of these listings:
–Very few had lots which had been watered regularly. Lots of brown and patchy lawns and dry landscaping and one vacant listing had a green pool. Much of the landcaping was elaborate and high-maintenance.
-Several had the original pink/maroon trim and beige/tan trim classic Daltile in the bathroom(s) and matching fixtures (circa 1950’s).
-MANY had 40+ year-old carpeting throughout, even kitchen carpeting, both (1970’s era) high/low plush in orange/brown and avocado/gold … even shag carpeting!
Most of the kitchens were only partially remodeled (meaning newer appls usually but maybe newer countertops but the old cabinets and flooring were left). I saw SEVERAL listings with plywood kitchen cabinets with their (intrusive) black hammered hinges and knobs of the era! Some had been painted over.
Most of the window coverings were castoff curtains the realtor threw up there and tied in a knot (on a vacant “staged” house) or very heavy multi-layered elaborate custom drapes with cornice boards and swags (circa 1970’s – ’80’s).
A few houses had grab bars and other bathroom modifications suggesting that senior citizens (or their estate) were the sellers.
Okay, so we’ve got a few dozen SFR listings on large lots just 10-15 mins from Cupertino or Sunnyvale (freeway optional) with some virtually at the foot of the redwood forest which have been owned for decades by the same owner (or their heir). Of course, I’m still able-bodied, but if I owned (or inherited) one of these properties (condition be damned) I’d by happy to pay the $850 annual taxes (+2% per year) and live there until I die. But that’s just me. Perhaps most of these sellers ARE now alone, sick/incapacitated (or both) and can no longer take care of the property.
I’m now of the opinion that there must be a “tipping point” where the gain (if they are able to successfully sell) is so great that, as a prospective senior-citizen seller, it is not worth keeping your ~$850 annual tax bill anymore.
Evidenced by a number of those listings now sitting on the market 47-68 days (an anomaly for this region), I DO believe that seniors (and their heirs) are now attempting to “test the market” to see how much someone will actually pay for what amounts to a gut/remodel (for most of today’s buyers) on a good-sized lot in their area. This tells me that even those buyers who can afford to buy these properties around there are letting them sit at the current asking prices. Obviously, a seller who thinks they might get $1.6M++ for a property they paid ~$32K for in 1961 (and has done little to the property over their years of ownership) is looking for a windfall to help fund the rest of their retirement or deposit into their “estate.” Or their “heir” is looking to fund their own retirement because they were unable to save enough themselves lol.
When a SD owner-occupant of a dated (even run down) SD house can only recover $300-$500K upon sale and their annual taxes are $850, it probably isn’t worth it to them to sell because they don’t know how much longer they’re going to live and they have to live somewhere. Also, storage units cost about $275 mo apiece and if one needs several of them (because they can’t bring themselves to get rid of anything) it can get pricey, so they decide to use their old (now vacant) home for storage. It’s more beneficial for them to just let their kid(s) deal with the house when the time comes. But if a similarly-situated senior citizen might instead recover $1.5-$2M upon sale of their longtime home, that’s a game changer. That’s plenty of money to pay one of their kids “rent” into eternity or their choices are exponentially increased as to where they could spend their remaining years.
I “saved” a few of these listings so I can monitor what they actually sell for and how long it took for them to sell. This was a very eye-opening “experiment” for me.
A little further up the coast (Half Moon Bay and Pacifica in SM Co) I also found 3-4 of what I thought were pretty good deals on larger lots listed in the $700’s today. These small “cities” are “off the beaten path” on the other side of the mountain range from SV and can be difficult and time-consuming to commute in/out of for SV worker-bees, especially when it rains. Hence, it seems some pretty good deals can still be found in there. I can’t currently qualify to buy into one of those areas but I sure wish I could put them on my retirement “short list.” :=]
Participant[quote=FlyerInHi]BG, developers can add a lot of housing along the 15 and 215. Yeah, I see sprawl.
Did you see Victorville? Costco, restaurant row, etc…
Did you see Corona? Dos Lagos shopping center, etc..They are not all workerbees who commute to West LA to work.
I just hope that Google/Apple or whoever comes up with creative destruction to bring us autonomous cars and better means of transport. Many of the parking lots could be re-purposed. Developers would love that![/quote]
FIH, if you’re claiming retirees (people who aren’t “worker-bees”) are moving to the high desert en masse, I would tell you that these are very likely NOT prior dwellers of CA coastal counties. They are likely previous inhabitants of AZ, NV or the inland counties of CA, where they weren’t able to recover a princely amount of equity from the sale of their long-owned home, necessitating finding a less expensive place to retire. Sorry, but longtime residents of CA coastal counties generally aren’t going to trade their current (likely paid-for) house to retire in the likes of Victorville, Hesperia or Palmdale, etc.
I did see a big shopping complex (outdoor mall?) off the I-15 service road in Victorville (right side headed south). Are you SURE this wasn’t built to serve passing tourists? I’ve seen factory outlet stores up there in a couple of towns which were built mainly for tourists passing through, evidenced by their massive billboard advertising on I-15.
Yes, I drove (northbound) through Corona on 7/29 and noticed that there is now a lot of newer commercial development in that corridor. That area isn’t considered “outlying.” It is within a well-established area of RIV County and so this newer development would be considered “infill.” Corona, a fairly large city, is only a hop and a skip away from the Orange County line.
Participant[quote=FlyerInHi][quote=AN][quote=FlyerInHi]I’m with shoveler. There will be more growth, either out or up. As much as I hate to stay it, shoveler is right, growth will likely continue to sprawl out because of NIMBYism.[/quote]
San Diego is building both out and up. For the up part, think Civita in Mission Valley, Stone Creek in Mira Mesa,and One Paseo in Carmel Valley. I’m sure others will come. Once we fully built out the “out” part, I can totally see other smaller cities w/in San Diego County would start to build up and have a more robust downtowns. I’m thinking a long the line of Gaslamp type of mix use developments in Carlsbad, Chula Vista, Poway, etc. But I think that day is a long time from now.[/quote]All good points. I love Civita and that style of denser (but IMO still not dense enough) development. But it’s more upscale than the average housing budget.
As shoveler stated there are lots of development along the 15 and 215 all the way up the Cajon Pass. I know someone who a dozen foreclosures in Moreno Valley. The area is coming back and that was a smart move. Too bad he’s dead now, but I’m sure his widow appreciates the investment.[/quote] FIH, the Cajon Pass is being completely revamped. Just as you probably often do, I just came over it on the 8th and there was a 90 minute southbound delay in all lanes. I-215 will eventually be the exact same road as I-15 leading up to Cajon Pass, without the previous two highway switches. A year from now, it will be streamlined and smooth … an amazing feat to a person like me who at one time took Hwy 395 in/out of SD, which wasn’t really a “freeway!” But Cajon Pass is part public lands and is thus not buildable. Beyond it, in the high desert, yes, there is likely still reasonably-priced land (and newer homes) available. But these small cities are too far (and too inconvenient with Cajon Pass in the way) to live in for a 4-5 day week worker bee working south of the pass. They are also very hot & windy and inhospitable (like LV) but they don’t have the fancy infrastructure that LV does.
I’m glad County has wised up and gotten realistic about the cost of servicing outlying CFD’s before letting this developer split town with the eventual proceeds from the sale of their eventual units at Horse Creek Ridge. (I could not see from DR Horton’s website that they have ever built anything in SoCal, so likely wouldn’t care what happens after they fold up shop and leave the county.) When the Harmony Grove CFD was formed (the only other CFD County ever approved), HG had not yet been folded into Encinitas and was unincorporated (part of County). County did not have a lot of experience with CFD formation but they learned their lessons well from their brethren cities (ex: Chula Vista) who were nearly bankrupted from attempting to service multiple CFDs they (shortsightedly and quickly) approved in the nineties and early ’00’s. This was due to mass downgrades in tax assessments for 3 years pursuant to Prop 8, as well as mass tax defaulters until their lenders finally chose to take ownership of the property (years later) making it impossible for City to get reimbursed a fair amount of their “Teeter funds” for their daily operations (including the full penalties eventually paid by property owners or their lenders):
https://en.wikipedia.org/wiki/Teeter_Plan
Almost ALL of these tax defaults occurred in 91913, 91914 and 91915 (where 95% of the CFD’s in CV lie) but residents of the entire city paid a heavy price in severely reduced services for years for these big blunders.
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