[BobbyD]

PC,

You are very welcome, glad that it worked out. I will mention it again, just make sure that your friend inspects the car thoroughly when they deliver it to him before he signs off on it. He should ensure that they did not damage anything in transport especially the undercarriage.

Tell him to make sure when they call him to schedule the delivery, he has them deliver it in daylight so he can see everything. Have him start the car and drive it if possible before he signs off. That would be my advice.

Take care,

Bob

[BobbyD]

Mello-Roos is a form of financing that can be used by cities, counties, and special districts (such as school disricts). Mello-Roos Community Facilities Districts (referred to as “CFDs”) raise money through special taxes that must be approved by 2/3rds of the voters within the district. A CFD is formed to finance major improvements and services within the district which might include schools, roads, libraries, police and fire protection services, or ambulance services. The taxes are secured by a continuing lien and are levied annually against property within the district.

A builder who develops a new housing tract development typically has to make certain improvements and put in the infrastructure to support the developments. If they do not foot the bill for all of these costs, they will work with the city/county to use CFDs to fund these costs.

In almost all cases, Mello-Roos special taxes are levied as part of the annual property tax bill. You should be able to find your Mello-Roos special tax as a line item on that bill. In rare cases, a Mello-Roos district will send out its own bill. To find out more about this bill, you will need to contact the agency directly.

Here is a link to learm how Mello-Roos or CFDs are formed:
http://www.californiataxdata.com/A_Mello_Roos/Formation.asp

Hope that helps explain Mello-Roos.

[BobbyD]

IONEGRAM,

That is very exciting news. Hopefully these knucklhead builders here in San Diego will catch on and do the same.

BD

[BobbyD]

We have friends who both work downtown and have been looking at Del Cerro and the homes that they have looked at have all been in the low millions ($1.1 – $1.3).

I think that Concho is right, it is just as overpriced and inflated there as anywhere else. There are no “bargains” in SD unless they are willing to live in the boondocks and have a long commute.

[BobbyD]

I moved to SD from Ohio in 98 and remember seeing then a lot of developments touting “No Mello Roos!”, so my assumption is that the builder can pay it off and use the lack of MR as a marketing incentive to sell homes.

I think that they pass those costs onto the buyer in an up market when they know they can get away with it and people will pay it. But the builder will absorb the costs in a down market when they know that they can not get away with it and it is a detraction for buyers.

I bet as the market gets worse for new homes, we may see builders reduce or remove mello roos. Hopefully . . .

[BobbyD]

There is a nice gated community in Escondido called “Ranches at Vistamonte” near the Wild Animal Park. Very nice new homes (3,700-4,500 sq ft) with large lots in the 800s. They used to be priced in the low millions ($1M – $1.2M). We used to live in the development next to it. It is a very nice area and very quiet. They have had a tough time selling the homes and in addition to lowering prices have also either lowered or removed the Mello Roos.

It is built by a smaller “boutique” builder called New Urban West that is based in Santa Monica. http://www.nuwi.com

So far that is the only one that I have seen that has lowered/removed the MR. I had the same understanding that MR can be paid in a chunk as well and therefore a builder could pay it as well as the buyer.

[BobbyD]

Thx SCHB. I have also seen it be reduced in one development here in SD as well.

[BobbyD]

PerryChase,

I have used Dependable Auto Shippers (http://das.ebay.com/)in the past to ship a car from here to Cleveland, OH. They did a good job, just make sure that your friend inspects the car thoroughly when deliver it before he signs off on it. He should ensure that they did not damage anything in transport especially the undercarriage.

Good luck,

BD

[BobbyD]

I could not agree with you more!

[BobbyD]

History Repeats Itself, especially in San Diego Real Estate. The following is from the DataQuick 1995 archives. This was nine years ago, it will happen again, it is the natural order of the RE cycle. Be patient.

DQNews Archived Article

California Homes Being Sold at a Loss
by Real Estate Analyst John Karevoll
June, 1995
La Jolla, CA.— Fewer California homes are being sold for less than they were bought for, indicating that many potential sellers have decided to stay where they are, a real estate information service reported.

In 30.7 percent of all May home sales, sellers ended up getting less for the home than what they had purchased it for. That loss percentage was down from 32.4 in April and down from 35.4 in May last year, DataQuick Information Systems reported.

Loss sales accounted for a steadily increasing portion of the market from early 1991 until a peak of 42.7 percent was reached in September 1993.

Large newly-built homes that were bought during the 1989 to 1991 sales surge have been particularly exposed, but the problem has spread into other categories as well, said Donald L. Cohn, DataQuick CEO.

” A lot of homeowners have put off selling during the past few years because of declining prices. So a higher percentage of those homes that were put on the market, were put there because the owner was under the gun to sell for one reason or another “. Many of these ‘have-to-sell’ situations result in a loss.

” We may find it shocking that three of ten sellers lose money, but we need to remember that it still means most people are making money, ” Cohn said.

DataQuick monitors all real estate purchasing, financing and foreclosure activity in California and other states and provides information to lending institutions, title companies and industry analysts. The numbers include all ” arms-length ” resale condo and resale house transactions where current and prior sales prices were available.

The median loss was $23,500 on a house sold for $203,000, originally purchased for $226,500.

Hardest hit were homes in areas that experienced the fastest run-up in prices in the late 1980s. In Orange County, loss sales accounted for 45.3 percent of the last three month’s sales (see chart), in Ventura County it was 38.0 percent.

Resale houses
Sales counts & loss percentages
March-May 1994 and 1995
Mar-May Loss Loss
County All Sales# Pct. 95 Pct. 94
Los Angeles 18,217 31.8 pct. 38.2 pct.
Orange County 5,705 45.3 pct. 49.9 pct.
San Diego 5,803 42.6 pct. 44.9 pct.
Riverside 4,208 35.6 pct. 32.1 pct.
San Bernardino 4,266 35.5 pct. 30.8 pct.
Ventura 1,945 38.0 pct. 58.4 pct.
So.Calif. Total 40,144 37.0 pct. 40.9 pct.

San Francisco 1,026 16.2 pct. 24.0 pct.
Alameda 2,828 27.0 pct. 24.4 pct.
Contra Costa 2,486 32.4 pct. 34.5 pct.
Santa Clara 3,650 22.0 pct. 28.9 pct.
San Mateo 1,353 19.8 pct. 30.0 pct.
Marin 526 13.5 pct. 15.3 pct.
Solano 769 31.1 pct. 35.6 pct.
Sonoma 1,099 26.7 pct. 26.2 pct.
Napa 209 9.5 pct. 22.3 pct.
Bay Area Total 13,946 25.0 pct. 28.5 pct.

Santa Cruz 298 12.6 pct. 19.6 pct.
Santa Barbara 440 20.1 pct. 30.9 pct.
San Luis Obispo 393 12.9 pct. 28.6 pct.
Monterey 391 14.9 pct. 21.8 pct.
Coast Total 1,522 16.0 pct. 24.8 pct.

Sacramento 2,357 35.7 pct. 37.3 pct.
San Joaquin 931 38.8 pct. 31.9 pct.
Placer 562 36.2 pct. 37.3 pct.
Kern 1,142 26.7 pct. 14.3 pct.
Fresno 1,154 14.9 pct. 15.9 pct.
Madera 152 5.0 pct. 8.8 pct.
Merced 259 17.3 pct. 22.1 pct.
Tulare 563 15.0 pct. 11.7 pct.
Yolo 226 38.2 pct. 23.9 pct.
El Dorado 301 12.6 pct. 20.7 pct.
Inland Total 7,647 27.9 pct. 26.0 pct.

All California 63,259 32.2 pct. 35.3 pct.

Source: DataQuick Information Systems

For more information call John Karevoll (909)867-9534

Copyright © 1995 DataQuick Information Systems.
All rights reserved.
——————————————————————————–

[BobbyD]

Brookfield is based here in SD and is a public company. That may be one that we can check on. Also McMillin is another, although they may be privately held.

We have been looking at Stonebridge in Scripps Rch and also at some of the SantaLuz developments and they are not dealing at all. I do know that they are dealing at Del Sur, but they have ruined that development because of their greed, the lots are tiny and the homes very close together. The only exception is Standard Pacific’s Avaron, but they are ridiculously over-priced.

We stopped there over the weekend, I asked what incentives they were providing and I have made it a habit now to ask, just to push their buttons. They gal said none followed by “our homes are still a good value” to which I responded “I would not go that far”.

I look forward to visiting them next year and asking that same question . . . bet she will have a different answer.

[BobbyD]

HeavyD, I do not disagree at all and concur with all of your conclusions above. I just wanted to share what I recall reading on one of the sites.

These guys have a lot of cushion and are my no means operating on thin margins and am sure that they anticipated and have prepared for this slow down.

In the new developments that my wife and I have looked at in Scripps Rch, the builders have not budged on prices and have provided little to nothing in terms of incentives. And they all have a dozen or so unsold homes sitting on their hands. But it appears that they are not hurting enough yet to lower prices or deal.

I know that there are other developments where the builders are being much more generous. Year end should prove interesting as they try to unload the unsold homes that are on their books.

[BobbyD]

I had read previously either on this site or another of the RE blogs that the builders cost is typically $83/sq foot. Perhaps, with higher end features, it is $115/sq ft.

If that is accurate, then assume that an average 3,000 sq foot new construction home sells for $1 million. At this sell price, there gross sell is at $333/sq ft.

So assuming the above, their margin is quite fat and much greater than 30 or 35%. Someone can validate that. That is what I remeber reading.

[BobbyD]

Poway, what is the URL for the Foreclosure Blog? I emailed both Ben Jones and DataQuick.

[BobbyD]

Thanks all, I will see what I can find. Steve, my buddy sent me that article as well and that is what started us to get into this conversation.

[Author]

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