Tuesday, August 4, 2009

A whole year!

19126 Hawkhill Ave, in Perris was foreclosed on lat year, August 2008 to be exact. It's just now hitting the market! It took the lender a whole year to get this property on the market.

Now I don't know the particulars of this property. It could be that they were tied up evicting a renter or the previous debtor or some other problem. But regardless of what the problem was, a year seems like a awfully long time between when a foreclosure happens and the property hitting the market.

Now the price on the home isn't too bad. At $96 s/f you get a large single story on a half acre. Yes the address says Perris but it's not "really" Perris. This home is up near Lake Mathews. The problem is that this particular tract is a little too close to Mead Valley. And Mead Valley is the meth capitol of the IE. The home is nearly 3000 s/f it has 4 bedrooms and 2.5 baths. It was purchased new in early 2005 for $414k. Then flipped 4 months later for $555k. That's not a bad deal eh? $140k profit in 4 months.... The bank took it back in Aug 2008, tried to get $290k at the auction but there were no takers. Now they have it listed for $258k.


Martin Burtin said...

$96/sf is in the ball park, but those dang mello-roos taxes are insane! The premium above normal 1% tax rate appears close to $6ooo per year. I want a home I can retire and turn wrinkled an onry in, and those tax rates forbid such. For the "investor", you might look into your crystal ball and pick a time frame, such as 10 years out, when you expect to be able to sell at profit. Now add an extra $60,000 to your carrying costs and see what happens to your "profit". Screw that!

Unless you are able to buy today at a price that you figure is 60K under whatever you think the bottom is (take your discount up front, not a bad strategy)... then I'd bite, maybe. Or not, I have a deep aversion to encouraging gummint taxation at these dangerous levels. I'd really prefer that these sorts of neighborhoods wither and die, because people refused to pay the high taxes. Then maybe there would be some accomodation toward taxes people can actually afford.

golfer_X said...

I don't think the Mello Roos is $6k. I've never seen one that high. Going off the last sales price of $555K the base tax would be a smidge over $6k so the Mello Roos is probably in the neighborhood of $3k per year. Still a lot. But nearly everything built in the last decade has mello roos and the ones built in the last 5 years have crazy high mello roos.

VectorzSigma said...

Ya, mello roos = big fail. I didn't realize that about Lake Mathews though. I was looking at buying a property near Hidden Valley Pkwy in Corona which also really close to Lake Mathews. Any word on if that's not a good area as well?

Karen's Corner said...

Don't forget about the cost of sending your kids to private school if you live here.

golfer_X said...

Hidden Valley pkwy is no where near Lake Mathews. That's a nice area of Corona and the older tracts (built in the late 90s) have fairly low Mello Roos. Some of the newer tracts have mello roos of up to $5000 per year. There are even a couple of small tracts with no Mello Roos in that area. It's very hard to find houses without mello roos unless they were built more than 15 years ago. Nearly all the newer tracts have it. And the newer the tract the more it usually costs.

Todd said...

Some of the newest neighborhoods in Rancho Cucamonga have Mello Roos fees over $5000 per year (I'm assuming a CFD is considered a Mello Roos fee).

Here is one example that has over $6000 in total fees on top of the 1% property tax:


Houses in that area were selling for $700k to well over $900k at the peak of the housing bubble but now you can find them selling for well under $500k.

There are several more neighborhoods in Rancho Cucamonga that were built around 2004-2006 or so that have similar fees on top of the 1% property tax.

Martin Burtin said...

Yup, CFD is same as mello-roos, they just twist words a bit, and call it a fee. Confuse the people, they won't know what hit them until it's too late. Their arrogance makes my liver twitch.

I suppose it was too easy for home buyers to justify paying those insane TAXES when their property was going up 10% per year or more. Those taxes were also a way for the gummint to participate in those crazy profits, and if you talk to any of those public servants (who prefer to think we serve them... grrrrr), they feel quite justified even today in demanding those taxes, although a struggling economy argues otherwise.

golfer_X said...

CFDs, mello roos or what ever they call it is a legacy of Prop 13. Prop 13 limited the amount of property tax. So it limited the amount of revenue there is to build schools, roads, fire houses, police stations and whatever else needs built when cities expand. Like most legislation Prop 13 was not very forward looking. Now, granted the California government blows through (wastes) more money than you can shake a stick at. And if the state was run correctly we probably could get by on the limited property tax. But the reality is that like most governments, California wastes more money than it spends wisely. So being limited in how much property tax they can collect they did an end run around the legislation and allowed these "fees" to be charged in order to offset the shortage of tax revenue. Now new buyers get hosed by paying far more property tax than neighbors that have lived there a while and to add insult to injury you CAN'T write if off. CFDs and Mello Roos are NOT tax deductible.

The California tax system just BLOWS!

golfer_X said...

One thing I forgot to say, I like the idea of a fixed level property tax that is pegged to inflation. Prop 13 tried to peg it to inflation but they set that rate too low and the initial rate is probably too low also. It certainly more fair to have everyone paying the same rate. Rather than having new homeowners paying 2.2% and other homeowners a few blocks away paying 1.1%. I say keep the concept but put the tax rate at a level where it pays for the required services. If that level is 1.3% then lets make it 1.3%. It will never happen though because we need a 2/3 majority to change it.