I pretty much took the summer off from seriously looking for a house. Now that the summer rush is over I have started looking again. I have not gotten too serious yet but lately I've been checking Redfin more and crunching some numbers on homes I might like. The payments are not too bad. Even though prices will probably fall a little more, with the low interest rates the payments are reasonable at the homes I'm looking at. The taxes however are insane on most of them. And on top of that many of them have HOA fees of $200 to $300 a month. I looked at a house in Norco Hills listed for $380k. It was a nice house with a pool although smaller than I want the price was good. But when I looked up the taxes it had nearly $5k per year in CFDs. That's over $400/mo! I could buy a pretty nice car for $400/mo. Another house I looked at had even higher taxes and had a $260 HOA. That one was the equivilent of a payment on a BMW 5 series or an E-class. I'm not talking total property tax, this is just the CFD (Mello Roos). And that Norco Hills CFD went to 2033, another 24 years.
This isn't news to me, I crunched the numbers last year too. But for some reason it didn't bother me nearly as much last year. Probably because I was more excited then about the prices finally falling. Now that I have snapped out of my state of euphoria, I am a little more unwilling to throw $500+ a month away. The problem is, there's not many tracts without mello roos or CFD's. And the few that don't have the taxes just don't excite me much (with the exception of Stellan Ridge, but those are still priced crazy high). So it's bite the bullet, settle for another area or find an older house or one without mello roos. The more I think about it the less I want to bite the bullet and pay those taxes. Over 20 or 30 years that is a shit load of money (or vacations or cars or nice whisky etc....)
The differnce in the price of the house you can buy is phenominal when you back out a $500/mo cost. That means you can buy a $500k home vs a $400k home and have the same monthly nut after taxes. Even using a less extreme home where the tax differnce is only say $300/mo, you could buy a $460k house vs a $400k one.