The top-of-the-line Pardee tract in Carmel Valley opened this weekend, and they had hundreds of people show up. The first release had eight homes available, starting in the $1,700,000s, but prices go up quickly from there:
With so many homes being built in Pacific Highlands Ranch, the Solana Beach school district is struggling to catch up. They need to build a new elementary school, or expand the existing ones. It looks like they are a little short on funds to build a new school (would they bump the Mello-Roos?), or instead they could bring in more portable classrooms:
The Statewide Community Infrastructure Program (SCIP) sounds like another name for 30-year Mello-Roos-type bonds whose proceeds are used to pay for things that governments or home builders used to cover.
Here is their intro:
The Mello-Roos at this Carmel Valley new tract is $2,932.90 per year, plus the Statewide Communities Infrastructure Program requires another $4,300 per year (total = $7,232.90 or about $603 per month):
These new homes next to the Crosby look reasonably priced – well, except for the HOA and Mello-Roos fees. They have five of these Plan-2 houses for sale, starting at $250/sf, which isn’t bad for homes with the master suite downstairs, private guest suite, and lot sizes that average 18,000sf.
But the monthly fees will make your head spin, and probably why they have standing inventory.
HOA fee at build-out = $536/mo.
Mello-Roos = $543 to $887 per month, depending on size of house/lot.
Shouldn’t every district being doing this? From thenctimes.com:
Property owners in the Old Creek Ranch area of San Marcos will save more than $2 million in special taxes under a bond refinancing that the city completed last week.
Located in the southwest part of the city, at Melrose Drive and Rancho Santa Fe Road, the area is part of a Mello-Roos district that levies special taxes to help pay for roads, traffic signals, and water and sewer facilities.
The refinancing will shave $2.1 million from about $19.1 million in outstanding bonds for those services by cutting interest rates from 5.88 percent to 4.60 percent.
That translates to a 10 percent reduction in taxes, which range on average from $1,070 per year for apartments to $2,420 annually for single-family homes, and $9,388 per acre for nonresidential properties. Under the new bond terms, property owners will save between $107 and $939 per year.
This is the second time this year that the city has taken advantage of historically-low interest rates to refinance bonds in its Mello-Roos districts.
The city took a similar action in January to cut property taxes in the Santa Fe Hills neighborhood of San Marcos by $52 to $141 per year.
Roque Chiriboga, manager of financial analysis and debt administration for the city, said earlier this year that city finance staffers continually monitor the bond market for savings opportunities, and have refinanced special tax bonds about six times in the past 20 years.
The council approved the change for Old Creek Ranch in May, and city staffers completed the refinancing earlier this month.
“At some point, there’s a tipping point where there’s a cost benefit to do the refinance,” city spokeswoman Jenny Peterson said. “When everything aligns and it’s the right move to make, then that’s when we take it to the Council.”
Hat tip to profhoff for sending this in, from thesfgate.com:
On the eve of tax-filing deadline, the Franchise Tax Board abandoned its campaign to get California property owners not to deduct a portion of their real estate taxes.
“We have removed material from our website that limits the deductibility of real property taxes to taxes imposed on an ad valorem basis,” the tax board said in a notice posted Friday on its website:
The news comes at a vexing time for taxpayers. Since the personal income tax filing deadline is Tuesday, taxpayers do not have much time to correct their returns if they followed the FTB’s advice and did not deduct school parcel taxes and eligible Mello-Roos assessments. “Amended returns should be filed if the originals already have been filed or cannot be corrected in time,” the California Taxpayers Association says in a report at www.caltax.org.
In December, the tax board wrote to the IRS asking it to clarify its position.
In a letter dated Feb. 6, an IRS associate chief counsel said the Internal Revenue code does not explicitly say real estate taxes must be ad valorem to be deductible. It says taxes that are not ad valorem could be deductible “if they are levied for the general public welfare by a proper taxing authority at a like rate on owners of all properties in the taxing authority’s jurisdiction, and if the assessments are not for local benefits (unless for maintenance or interest charges).”
Although the letter was dated Feb. 6 and posted on the IRS website in March, the tax board says it never received it.
“We saw it on April 5,” when a legislative analyst ran across it on Taxanalysts.com, a news service for tax professionals, says Denise Azimi, a spokeswoman for the tax board. Azimi confirms the letter was a response to the tax board, even though its name has been redacted.
Do you dislike the idea of paying Mello-Roos fees? Now that the State of California has changed the tax forms to ensure you can’t deduct them by accident anymore, would you like to pay them off?
This is what a reader found about paying off his Mello-Roos in advance:
My MR servicer gave me an estimate of $58,000 payoff on yearly MR of $5400. The total of $5400 is actually from two CFDs. One has interest rate of 5.5% and the other with interest rate of 7.5%.
Total cost of MR over the next 22 years would have been $160,000, including interest and the 2% increases every year. By paying off now, I’m looking at next 10-11 years of equivalent MR payments, but I think anyone planning on staying put for over 5 years should consider this as an option.
Besides the cost savings, what are other potential benefits?
Are you thinking of selling? With your CFDs paid off, you’d be able to offer the benefit of “No Mello-Roos” as an advantage over others for sale in your neighborhood. Rarely do you see newer houses for sale without Mello-Roos – set yourself apart from the rest of the competition.
How much benefit?
By showing buyers how much they are saving in Mello-Roos fees, not only would your home sell faster, buyers would probably pay more – perhaps an extra $10,000 to $20,000 – over others in the neighborhood.
Are you thinking of buying? Make sure to check how many years are left, and the annual increases.
To get the phone number to the Mello-Roos (CFD) servicer, check the tax bill.
Plug in the address at the link below, and scroll down:
Hat tip to ProfHoff for sending in this update fromsfgate.com:
Many California homeowners may be surprised to learn that some charges on their property tax bills are not deductible on their income tax return.
The Franchise Tax Board is on a mission to get California homeowners to follow the law and stop deducting the entire amount of their property tax payment. Increasing compliance would raise money for the state and federal government.
(Reminder: California homeowners must pay the first half of their 2011-12 property tax payment by Dec. 10 to avoid penalties.)
Tax pros say the vast majority of homeowners deduct their entire property tax payment as an itemized deduction on their federal tax return, even though federal law prohibits deducting certain taxes and fees. Taking the full deduction reduces state as well as federal taxes.
To be deductible, a property tax must be a percentage of the home’s assessed value (known as an ad valorem tax). It also must be imposed uniformly throughout the community and benefit the general community or government.
Any tax that is a flat fee per household or an itemized charge for services assessed against specific property or certain people is not deductible. Nondeductible charges might be identified as Mello-Roos or Community Facilities Districts, 1915 assessment district bonds, lighting and landscape, parcel taxes, school or college measures and bonds, water, sewer, flood, police, fire and libraries, the tax board says on its website.
Property tax bills do not break out which charges are and are not deductible. In many cases, it’s hard to even decipher what the charges are.
Nevertheless, the tax board told tax preparers in September that it was going to add three lines to 2011 California income tax returns asking homeowners for their parcel number, the amount of property taxes paid and the nondeductible amount.
After getting many complaints from the tax community, the board decided in mid-November to postpone these changes until 2012 tax returns and in the meantime try to educate homeowners about the issue.
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.
These new tracts in northeast Carlsbad seem to have decent pricing, with 1,753sf homes starting in the high-$400,000s on the lower end, and 3,000+ square footers in the mid $600,000s.
But even with the tax credits, they have only sold half of the homes released in the last two months, which should have been the hottest new-home-sales market in the history of the world. You can see it in their eyes, and hear it in their voices – the sales people are getting nervous:
The values of nearby condos should benefit greatly from the housing shortage around UCSD: http://enewspaper.sandiegouniontribune.com/infinity/article_share.aspx?guid=5997c243-aa01-4fdd-96f6-d71d8fd7f25a - As numbers boom, UCSD embraces its more social side
Jim the Realtor is legit - I interviewed three brokers; he said list price should be $100,000 higher than the other two brokers; listed it with him and had all cash (no financing) offer in two days, five day contingency period, closing in two weeks - and it closed at his recommended list price. I could not recommend anyone more than I recommend Jim the Realtor.
When we moved to San Diego in 2005 we rented a big house on Mt. Soledad (La Jolla) with 180 degree ocean views for the same payment as a mortgage on a dump in Chula Vista. Clearly something was wrong. Yet, the media was full of the usual happy-talk nonsense, so I was glad to find Jim's blog. I've followed his honest assessments and data since.
We decided to sell and move to AZ at Thanksgiving. Dec. 1st we met with Jim to sell our home. We closed today (29 days later). Jim orchestrated a feeding frenzy -- we had 25 showings in 2-1/2 days, multiple offers, and sold for well over asking price. I'd say he earned his commission! We have owned and sold homes in 5 different States always using experienced, productive, full-time realtors. Jim outshines them all.
You don't decide to sell and close 29 days later over Christmas (with COVID lockdown) without some miracles. Donna was amazing at performing lots of those miracles and ensuring that everything was done right and on time. They are a terrific team with a very responsive and professional network.
Where do we begin..2020 has been a year for everyone. When COVID hit and shut down both my husband and my businesses, we were left with a mortgage and very little income coming in. We were stressed, scared and felt stuck. We made the hard decision to sell our home and move out of state. We contacted the Klinges' and spent a good hour going over what we hoped we could accomplish. Jim and Donna came over with comps in hand and suggestions on improvements to get our house ready for the market. It was overwhelming to think about, but Donna was there and one step ahead in every scenario. Basically we just approved what they suggested and Donna handled literally everything. We placed our house on the market and within the first day we had multiple offers well above asking price! We couldn't believe it. We were overjoyed! Jim countered the offers to weed through them, and everyone came back with way more. It was amazing, and we are ?? sure it was because of the staging and repairs the Klinges suggested we do.
Due to unforeseen dishonesty from the buyers lender, we hit a big hurdle when trying to close. We had already moved out of state and were shocked when three days before closing the lender dropped a bombshell on the buyers and us. However, Jim and Donna handled it like veterans, not afraid to play hard ball and represent their clients. After a few phone calls with us, and several between Donna and the lender, they had a plan B-Z to make sure we were taken care of. In the end we closed with even more money than we ever thought possible and with very little work from us. The Klinges handled this entire "2020" worthy event with the utmost professionalism and did everything in their power to not only make this as smooth as possible for us, but we also walked away with more money from the sale of the house than we ever hoped for. After working with Jim and Donna, you don't ever use anyone else. They are hands down the best team to represent you in any scenario.
Working with Klinge Realty Group was a great experience! They are very responsive, professional and knowledgable about the real estate market! I would definitely recommend Klinge Realty Group.
Jim and Donna Klinge made the sale of our condo extraordinarily easy. They know the market and gave us sound advice backed by details and very considerable experience, reflected both in the initial pricing and subsequent negotiations. They work together as a team and are always available to talk. We had a few challenges with our property and they were able to coordinate the resolution to everything, including items that I would not think would ordinarily be their responsibility to handle. They made the whole process effortless on our part. They are folks with high integrity and we cannot recommend them highly enough.
Review for Member: Donna Klinge
I cannot believe there are no reviews of Donna yet, ugh!! She is the secret sauce of the Jim Klinge/Donna Klinge combo! I will touch on Jim here, but Donna is why I'm so totally loyal to these two (no offense to Jim :)).
I consider myself a rather savvy buyer/seller. I've bought/sold 7 times in about 15 years. On the buy side, Jim is the PERFECT combo of: completely digitally savvy (he will pull data all day long until you feel comfortable with your chosen house, area, school district, anticipated appreciation rate...anything!), he's super well respected and known in the area by other agents, an amazingly cool but strategic negotiator, is totally devoid of desperation for a sale/commission, and more.
Then once you get into contract phase, Donna literally handles every last and final detail in a concierge-like manner -- totally shielding you from the daily back and forth, noodling and annoyances of the buyer's requests. She solves it ALL; it's miraculous what that woman accomplishes over and above what is even expected in a buy/sell transaction.
On the sell side, Jim and Donna do the same, but even moreso. Donna in particular truly takes everything off your plate: she'll manage getting the house painted, the carpets replaced, she'll go on site (as she Jim both did for me when selling our rental properties) to work with the renters and make sure the house is ready to show -- freeing me to have to take time off of work to do so. They work with A+ integrity, too, so you know you are serving all parties fairly and lawfully throughout.
A home purchase/sale is the most considered you'll ever make. HIRE A SAVVY AGENT, not a friend!, and get what you need out of the transaction. Jim and Donna are our agents for life.
Jim and Donna Klinge are by far the most professional, personable and responsive realtors I have ever worked with. They provide VIP concierge level service in every area of the process of selling your home. My home was marketed so successfully that we received an offer the day after our first and only open house. Thanks to Jim's pricing and negotiating, our house is now the highest sold in our community. Jim's vast experience means he has worked with several realtors and knows the market all over north county. Donna is AMAZING in processing everything in the transaction. She scheduled trades people to work on the house in preparation for the sale as well as the repairs needed before closing. She communicated clearly every step of the way about what would be happening. She took the weight off my shoulders for the whole process. I will always use Jim and Donna for my future real estate needs and I whole heartedly recommend them to anyone buying or selling a home.
Jim and the team at Klinge Reality are without a doubt the best in the business! Not only was Jim helpful and extremely knowledgeable, he was patient and determined to help me find my first home. Jim and his team have been in the business for many years, and it shows. Jim is a wealth of knowledge and was my biggest proponent despite the temperature of the competitive market. I ended up getting the perfect property in my dream neighborhood all thanks to Jim. From the day my offer was accepted, Donna was a real lifesaver. She was extremely helpful, responsive, and knowledgeable when it came to every minute detail, and held my hand through the process. As a first time home buyer I had no idea what the process would entail, but Donna curtailed every concern I came across and made the escrow process feel seamless. Jim and Donna provided me the best home buying experience, and I am very grateful for all they did for me. It was truly a pleasure to work with Jim and Donna and I am already looking forward to the next time we work together!
Review for Member: Richard Morgan
Richard is an amazing realtor! He has high integrity and genuinely cares about his clients and their needs. Richard paid close attention to what I was seeking in a home and was very patient in our search to find it. I would highly recommend Richard and will use him for future transactions. Truly a different kind of realtor experience!
Could not be happier with my experience with Jim and his team. He helped me sell a very unique and challenging property. Throughout the entire process he was always available, honest, transparent, trustworthy, and always put my interests as a seller first. A (rare) true professional! During close of escrow Jim went above and beyond to complete the deal. It would not have been possible without his experience, fantastic team, and pure dedication. Highly recommended!
Thanks Jim and Donna Klinge!