The Mello-Roos payments in some of the newer tracts seem outrageous. But is it the compromise some will make to conveniently buy a house?
After all, there are some great benefits:
For those less-handy, a new house offers the least-likely to have physical problems.
You get the house you want, when you want it.
You get to dress it up to your satisfaction.
Compared to the frustration of chasing around imperfect resales, it doesn’t sound that bad – of course, after you’ve had your head kicked in a few times, anything sounds better!
But what about resale?
Will future buyers shrug off the Mello-Roos, knowing that it is part of the package if you want a newer home, and to live in these areas? It is temporary, ranging from 25 to 40 years, so once you get close to the end, the math is a little easier. But in the meantime, it could become the compromise that some homebuyers make just to get a house.
Four Republican attorneys general participating in the investigation into mortgage servicing practices wrote a letter to Iowa AG Tom Miller stating that the proposed settlement is too strict.
Florida AG Pam Bondi, Texas AG Greg Abbott, Virginia AG Kenneth Cuccinelli and South Carolina AG Alan Wilson sent the letter Tuesday explaining among other claims that homeowners would strategically default on the mortgage in order to take advantage of the consumer-friendly terms.
The 50 state AG investigation came after the largest mortgage servicers were found last fall to be foreclosing on homeowners improperly through faulty affidavits. Lenders conducted reviews of their processes and have begun to correct the affidavits, but in February, Miller and several core offices participating in the investigation sent a proposal to the banks outlining a possible settlement.
The terms included an end to pursuing a foreclosure while borrower was being evaluated for a modification. Considering a borrower for a workout, including a principal reduction, would be mandatory before foreclosure as well, and a decision on modification must be made within 30 days of receiving documentation.
But not a consensus among the AGs has been elusive. The four signing the letter this week complained Miller and the other offices overstep their bounds.
“Because of the term sheet’s vague principal reduction standards, some homeowners may simply default on their loan and use the States’ agreement to obtain a principal reduction— whether or not they actually made an effort to maintain their mortgage,” according to the letter.
The four AGs go further, saying the terms do not address the nature of the investigation. Modification proposals would not remedy the violations banks made, and while they admit the terms, many of which they do agree with, act as a starting point, some proposals should be scaled back, according to the letter.
“In our view, the fifty-state working group has a unique opportunity to address the mortgage servicers’ legal and financial malfeasance on a national scale—but we are concerned that expanding beyond the scope of our already expansive charge may ultimately undermine the effectiveness of our law enforcement efforts,” the letter reads.
Generation X—young families and adults ages 31 to 45—are likely to lead the home-buying recovery as it gets underway, according to real estate experts who spoke at an educational webinar produced by the National Association of Home Builders (NAHB) in partnership with Builder magazine.
These potential home buyers are most likely to think it’s a good time to get off the fence—and have strong opinions about the design features their new homes will include.
At 32% of the population of home-buying age—generally defined as those who are at least 30 years old, the Gen X population cohort isn’t the largest, but it’s the most mobile, said presenter Mollie Carmichael, principal of John Burns Real Estate Consulting in Irvine, Calif. “They are in full force with their careers and they need to accommodate growing families,” she said.
In sharp contrast, even though they constitute 41% of prospective home buyers, Baby Boomers continue to wait for the market to improve, and their decisions to delay retirement also delay their decisions to downsize into a smaller home, Carmichael said.
Most of the 10,000 buyers and potential buyers in 27 metro areas that the consulting company surveyed were optimistic about a new home purchase, with between 85% and 89% saying that it was a good time to buy a home. Only 13% said they thought home prices would continue to fall, further evidence that it’s “not all about price,” she said. “They want something compelling, from a design or personalization standpoint,” said Carmichael.
In addition, though the average home size is shrinking, a majority of prospective buyers said they would like a bigger home than the one they have. “These are first-time buyers or younger families looking for more room to grow,” she said.
Seventy percent said that they were willing to pay $5,000 more for a green home, but those responding to the survey said that they expected new homes to already have many green technology features. They also said they would pay a premium for dark wood cabinets, a separate tub and shower and a fireplace in the living room, and more preferred a great room over formal spaces.
And while community amenities are important to Gen X buyers, 46% said they prefer a home in a large-lot, suburban development, versus the 21% looking for a traditional or “walkable” neighborhood.
Webinar panelist Heather McCune, director of marketing at Bassenian/Lagoni Architects in Newport Beach, Calif., also emphasized that design will be important in generating sales in the emerging marketplace. “The notion of ‘build it and they will come’ no longer works. Design matters,” she said.
McCune said buyers are looking for homes with a connection between indoor and outdoor spaces, even in colder climates, to create the perception of greater home size, even if the space is only usable for part of the year. They also want more storage, an open floor plan and flexibility in the garage.
“While Gen X numbers are smaller than the birth cohorts before and after them, their numbers have been enlarged by steady immigration,” said NAHB Chief Economist David Crowe. “Gen X may wait longer than their predecessors to establish their own household or buy a home because of the recent recession impacts, but the trends are still likely to occur as they have for past generations.”
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School officials have narrowed the list of potential names for the high school being built in Carlsbad down to 10 finalists, all based on geographical or environmental characteristics.
More than 200 people submitted suggestions on what to name the school the Carlsbad Unified School District is building near the intersection of College Boulevard and Cannon Road in eastern Carlsbad.
District officials whittled down the list from more than 100 unique names to their 10 recommendations.
The finalists, and the explanations for them, are:
—- Calavera Canyon High School, because the campus is in a canyon near Calavera Lake;
—- Canyon Del Oro High School. The name means “Canyon of Gold,” referencing the area and the quality of education the school will provide;
—- Foothills High School, because the campus sits in the foothills;
—- Hillside High School or Hillside Academy, because the campus is built against a natural hillside;
—- Lake Calavera High School or Calavera Lake High School, because of the school’s proximity to the lake;
—- Laguna Vista High School, because of the school’s proximity to the Agua Hedionda Lagoon;
—- Ridgeview High School, because of the view surrounding the site;
—- Sage Creek High School, because of the habitat in the area that is home to the endangered Bell’s Vireo;
—- Shadow Mountain High School, because when the sun rises the school will be in the shadow of Calavera Mountain;
—- Sunset Hill High School, to describe the sun setting over the nearby ocean.
It will be up to the district’s school board to determine what to name the school. The trustees are expected to pick a name at their next regular meeting, which is scheduled to start at 6 p.m. Wednesday at City Hall, 1200 Carlsbad Village Drive.
At a meeting earlier this month, the trustees asked staff to eliminate names that related to people or specific neighborhoods. They said they wanted a name that had to do with the geography or environment around the school since most of the names submitted did.
A small committee of district officials that reviewed the names also decided to eliminate any names that were similar to nearby schools or that had the same initials as Carlsbad High School, said Suzanne O’Connell, assistant superintendent in charge of instructional services for the district.
“That eliminated many of the names,” she said.
The district plans to open the school in 2013 with only freshmen and sophomores, adding a freshman class each year until it reaches 1,500 students in grades nine through 12. Originally, the plan was to have the campus finished in 2011, but work was delayed a couple of years because of environmental concerns. Work at the 57-acre site started in October.
The project is expected to cost $104 million. Most of that will come from Proposition P, the $198 million school-construction measure voters passed in 2006.
District officials have recommended the school be a comprehensive high school, with a special focus on science, math, technology and engineering, that would be open to students throughout the district.
Last year the mainstream media was happy to dismiss any healthy signs in the real estate market, saying it was all due to the housing tax credit. Over the next few months, the national existing-home sales and prices will be compared to last year’s stats – will there be any mention of the tax credit now?
Sales of previously owned U.S. homes fell unexpectedly sharply in February and prices touched their lowest level in nearly nine years, implying a housing market recovery was still a long ways off.
The National Association of Realtors said Monday sales fell 9.6 percent month over month to an annual rate of 4.88 million units, snapping three straight months of gains.
The percentage decline was the largest since July.
Economists polled by Reuters had expected February sales to fall 4.0 percent to a 5.15 million-unit pace from the previously reported 5.36 million unit rate in January, which was revised slightly up to 5.40 million.
The median home price dropped 5.2 percent in February from a year earlier to $156,100, the lowest since April 2002.
“If the price declines persist, even with the job market recovery, that could hamper recovery in the housing market,” said NAR chief economist Lawrence Yun.
Compared with February last year, sales were down 2.8 percent.
At February’s sales pace, the supply of existing homes on the market rose to 8.6 months’ worth from 7.5 in January. A supply of between six and seven months is generally considered ideal, with higher readings pointing to lower house prices.
San Diego County is faring better than national, and the detached-home market in NSDCC looks very healthy – here are the local numbers from today’s MLS:
San Diego County Detached and Attached
Month
# of Sales
Avg$/sf
SP:LP
DOM
Feb ’10
2,210
$229/sf
99%
66
Jan ’11
2,050
$217/sf
97%
83
Feb ’11
2,080
$227/sf
97%
86
The San Diego County stats for February, 2011 show that sales were +1% month-over-month, and -6% year-over-year. The pricing was +5% month-over-month, and flat for year-over-year.
The longer “days on market” stat helps to demonstrate how overly-optimistic the sellers are on price, and how reluctant they are to come down. By the time your house has been on the market 86 days, the buyers have forgotten all about you – unless you dump on price to re-ignite the urgency.
North San Diego County Coastal Detached
Month
# of Sales
Avg$/sf
SP:LP
DOM
Feb ’10
143
$376/sf
96%
78
Jan ’11
148
$365/sf
95%
85
Feb ’11
162
$376/sf
96%
90
February sales were +9% month-over-month, and +13% year-over-year. The average cost-per-square-foot was mostly flat. North SD County Coastal was less affected by the tax credit, if at all. We just keep cruising!
