Mark Thorngren

Victoria Estates In Oxnard, CA

Think of a premium community with all the amenities including a guarded gate, swimming pool, spa, recreation building and parks - built between late 2002 and 2004. Put it next to an award winning golf course that also just happens to be adjacent to where the Dallas Cowboys practice in late summer. Fill the sky with fresh air from the Pacific Ocean about a mile away and cool breezes which defeat the need for air conditioning. Put two major yachting harbors with restaurants and shopping - equidistant to the North and South about 4 miles. Now take these gorgeous homes which recently were listed from the high $800K's to the $1.3M range and subtract $100K to $200K from their sales price - nothing is currently listed above $812,900 and one home is currently being listed for $550,000!

That's Victoria Estates.

Today is October 13, 2008 and I have just finished looking at everything which has come to the market in Victoria Estates since October 1, 2007. There were 65 properties listed in the local MLS (Multiple Listing Service). By my count, there were an almost equal number of Foreclosures and Short Sales (33) as there were conventional home sales (32).

These are truly tragic numbers for home owners and sellers. They accurately reflect the time period during which home mortgages were given to anyone with a pulse, often with variable rate clauses which nobody ever expected would activate. Get behind on your mortgage? Just refinance in a year and drop your rate. Worst case, just put it on the market and it will sell in a day.

Then things changed. The new Fed chairman raised interest rates 9 times in one six month period. Home prices began to soften as fewer folks could afford the new mortgage rates and the high home prices. Homes took longer to sell because home owners knew their homes were worth and insane amount of money and would not compromise. Gradually, home owners began to see their interest rates adjust upwards on their new homes and they were suddenly upside down on their mortgages. They owed more than they could easily sell their homes for. Still sellers refused to "give away their homes."

The rest is history. Home owners couldn't refinance to a lower mortgage rate on a home that was worth less than when they purchased it after only a year or two. Banks couldn't make as many stated income loans and found they needed to tighten up their lending limits. This made it harder for folks to buy homes from the people desperately trying to sell. Banks began to pull out of escrows that had been approved just days earlier. We lost 1/3 of our mortgage lenders in the fall of 2007.

Victoria Estates is the poster child of the Real Estate Meltdown.

Victoria Estates is also buyers dream.

There are 5 tracts within the Victoria Estates Development.

River Glen 1 This tract has had 14 homes listed during the last year. HOA's range from $120/Month to $144/Month.

River Glen 2 This tract has had 4 homes listed during the last year. HOA's range from $140 to $144/Month.

Glen Eagles This tract has had 13 homes listed during the last year. HOA's range from $120 to $144/Month.

Legacy This tract has had 24 homes listed during the last year. HOA's range from $120 earlier this year to as high as $147 this year.

Pacifica This tract has had 10 homes listed during the last year. HOA's range from $120 late last year to $150/Month late this year.

I spent considerable time in the last several months escorting astute investors, bargain hunting new home buyers and folks who just want to live somewhere special into Victoria Estates. I don't have a crystal ball, but I don't think these beautiful homes will continue to fall in price forever. In a shorter time than most "experts" predict, I think we'll see home values firm and turn in this development.

There are 15 homes currently listed between $550,000 and $812,900. Many homes are short sales which I do not personally recommend but they can be done. Ask me why I do not like short sales and I can recount a number of horror stories. Still there are some reasonable opportunities for folks who are in no hurry and can accept the risk of banks who have no sense of timely communication and may decide to foreclose even with a strong offer.

There are 8 homes currently in escrow with prices ranging from $599,000 for 2,900 sq ft; to $830,000 for a home with just under 4,500 sq ft.

If you are not from California these prices will shock you. If you are from California and are aware of what near ocean properties are marketed for, these prices will shock you as well.

17 homes have sold in the last 12 months for prices ranging from $570,000 this last April, to a home which sold for $875,000 a month earlier in March! Just as an example of how erratic this market is right now, the last 3 homes sold in Victoria Estates were all sold in July. They were all 4 bedroom and 3 bath homes, built in 2003 and sold within 3 days of each other.

The first home was a 2,882 sq ft home sold July 22 for $704,000.

The second home was a smaller 2,464 sq ft and sold July 25 for $605,000. It went for $100,000 less and was only about 400 sq ft smaller!

The third home was a larger 3,137 sq ft and sold July 25 for $640,000 but with a smaller yard. Still, this home sold for a $64,000 lower price and was larger than the first home!

The 2 lower priced homes were on 7500 sq ft lots while the first higher priced home was on a 12,000 sq ft lot.

There were 10 properties which were cancelled during escrow and they ranged in price from $629,000 for a 3,300 sq ft home, to a home originally offered for $1,300,000 for 4,000 sq ft. It was reduced in price after 188 days on the market to $800,000 and then cancelled. That might have proved to be an unfortunate decision, as home prices over the last year have dropped to a median $704,000 in Victoria Estates.

There were also 13 homes which became expired listings in the last year. Most homes are listed for a six month period, but can be listed for any time frame the seller desires and the listing agent will agree to. These homes were listed for $679,000 for a 2,700 sq ft home, on up to $1,099,000 for a 3,100 sq ft home. Most likely, these folks can afford to wait out the market.

It is interesting to note that 25 of the properties of the 65 that were listed, did not sell and were cancelled, expired or released from showing.

Again, 11 were foreclosures and 22 were/are short sales. Those numbers just totally destroy any normal market price.

It's definitely hunting season for buyers at Victoria Estates.

Just as an aside, I checked the rental market from what is on our MLS. These homes are probably not inclusive of all the rentals for the year, a lot of that market happens outside of the MLS, but still, there were 9 homes listed for rent ranging from $2,800/Month for a 2,700 sq ft home, to $3,500/Month for a 3,300 sq ft home. Both of those homes are currently available along with a 3,600 sq ft home for $3,000/Month.

Some investors are purchasing these homes and renting them back to their former owners. Everyone wins a bit in that situation. Families can keep their kids in school and maybe buy some time to decide their next move. Investors can rent the home at a bargain rate to someone who will very likely take good care of their investment.

All the figures and information used for this report were drawn from my own personal experience working in Victoria Estates and from the information available to all realtors in the Ventura County Regional Data Share. I would be happy to share CMA's for any of the 5 tracts with interested folks and can even send you mapped reports of these tracts as well. Please know that I do value your comments and suggestions.

Please feel free to contact me for additional information on these homes at:

mark@markthorngren.com or call me direct at: (805) 504-0228

You are welcome to visit my website at www.markthorngren.com where you can also keep up with current mortgage and real estate news in a video format from RealtyTimes.com. It's fun, informative and it updates nearly every day. Bookmark it and use it as often as you like.

It is important that you know, that I do have time for you, your family, friends and people you like who could use my help right now. Your introductions are my greatest compliment.

Warmest Regards,

Mark Thorngren

The Truth About Mello-Roos

The Real Benefits of Mello-Roos

As always, today's families recognize the importance of living in a community that's as desirable as their home itself. Mello-Roos enables critical community facilities to be provided whenever they're needed at a lower cost ultimately to homeowners. By doing so, Mello-Roos ensures a higher quality of life for every family in that community. Perhaps most importantly of all, Mello-Roos helps preserve the value of your new home investment.

Where did Mello-Roos Come From?

When Proposition 13 passed in 1978, it severely limited the ability of local governments to use property taxes to construct public facilities and services. As a result, Californians were forced to find new ways to fund public improvements in their respective locales. The Mello-Roos Community Facilities Act of 1982 was co-authored by Senator Henry Mello of the Monterey area and Los Angeles assemblyman Mike Roos. Enacted by the California legislature, the Act enabled "Community Facilities Districts" (CFD's) to be established by Counties, Cities and School Districts as a means of obtaining this crucial community funding. Today the colloquial name for the Facilities Act of 1982 is simply "Mello-Roos."

What Public Facilities are Funded by Mello-Roos?

The Problem: Before Proposition 13, state and local governments used income collected through property taxes to build new roads, schools and other necessary community facilities. In order to continue building residential areas, these same governments were forced to require builders of new communities to pay for these public facilities. Consequently, these funds were added to the cost of the new homes. These price increases hurt new home buyers and fewer people were able to afford these higher priced homes.

The Solution: Since state funds are not available to provide the quality of facilities necessary in every community in California, Mello-Roos makes the acquisition of timely financing possible. In addition, Mello-Roos can provide financing for other vital community needs. These needs include the construction and maintenance of public roads, traffic light systems, storm sewers, water mains, police stations, fire stations, ambulance services, public libraries, recreational parks, museums and cultural facilities. Now homeowners are paying for these improvements through their Mello-Roos Community District as part of their property taxes, spread out over 20 years or more instead of as an initial increase in their home purchase price.

How is Community Funding Provided?

Let's say, for example, that plans for a new school are approved in your Community Facilities District. To finance the school, tax exempt municipal bonds are issued. These public bonds are repaid (or secured) over an extended time through the levy of a special tax (Mello-Roos) on properties that benefit from the facility. This tax is usually added to the annual property tax bills (over a 20-25 year period) of residences within the CFD. Commercial and industrial property owners are also subject to Mello-Roos. All proceeds raised from Mello-Roos assessment must be used exclusively to finance the specific public facilities and/or services that were authorized in your CFD.

How Much Will I Be Assessed?

This will vary from one CFD to another. Typically, an adopted formula that relates to the size of the home (square footage or lot size) is used to determine the amount of an individual assessment. In general, the special taxes and assessments do not exceed 1% to 1.5% of the market value of new homes. Moreover, the total amount of all annual taxes (including property tax) usually does not exceed 2% to 2.5% of the home's market value.

Will My Mello-Roos Tax Increase

It can. However, this special tax can increase only at a maximum rate of 2% per year over a 25 years period. On the other hand, it's possible that this tax will decrease, should state or other funds become available that could be used to reduce existing bond indebtedness, or be used to construct new facilities in lieu of additional bond sales.

Can I Choose How to Pay for Mello-Roos?

Yes. As already mentioned, the special assessment can be added to your property tax bills until your portion of the tax is paid off. A schedule of maximum special tax payments over a period of 25 years is available to homeowners prior to the close of escrow. Those who purchase a new home also have the option to pay for their Mello-Roos tax in it's entirety at the time they buy. However, because statistics indicate that the average homeowner in California moves every 7 years, it's often prudent to spread the payments over time.

Why Can't Builders Bear the Cost of these Facilities?

They can. But ultimately, the builder must recover these considerable costs in the form of higher home prices. Commercial construction loans acquired by builders typically incur higher rates of interest than CFD financing, which accrues at significantly lower rates.

Does Mello-Roos Makes Sense?

Not all new home communities are affected by Mello-Roos special taxes. For example, sometimes a new neighborhood is built within existing communities. Because public facilities are already in place, they are not subject to Mello-Roos taxes. However, as cities expand into adjacent undeveloped areas and farmland, newer developments will continue to use the Mello-Roos device to finance improvements we all take for granted in our neighborhoods. Mello-Roos lowers these costs a bit since CFD (Community Facilities Districts) financing is less expensive than what builders would have to charge to underwrite commercial loans.

So California voters approved Proposition 13 to lower their taxes. Our lawmakers took the constraints we imposed on State and local government spending and developed a way to fund all the infrastructure we expect in a new home development. They did it by collecting Mello-Roos assessments from those homeowners in new neighborhood developments instead of taxing all California voters. I wonder how many of those new home owners voted for Proposition 13?

What's the Bottom Line?

New home developments often advertise sale prices which do not emphasize special assessments like the Mello-Roos. Between HOA's and Mello-Roos and other assessments, you can easily see an additional 2% monthly charge based on the sale price. Since this is not a developer added cost, but one that is imposed by local government, these homes look like huge bargains. Not entirely meant to be misleading, it is a little bit like advertising a brand new car without the tires. Check the fine print. This is your local Community Facilities District answer to Proposition 13. It is a way of coping with a difficult situation. Instead of the State, County or local Communities footing the costs for these street lamps and schools - you the new neighborhood homeowner are the bottom line.

Warmest Regards,
Mark Thorngren

Much of this article was shamelessly copied from title company reports. Namely Fidelity National Title Company and Chicago Title. Two very fine and naively trusting supporters of my business. Special thanks to Tammie Coulter of Stewart Title Company for her mastery of this subject.

The preceding summaries are provided for informational purposes only. For a more comprehensive understanding of the legal/tax consequences of Mello-Roos, appropriate consultation is recommended with an attorney and / or a CPA for specific advice.

www.markthorngren.com

mark@markthorngren.com

(805) 504-0228

Here is an update to a blog I wrote about the RiverPark development last year. I have seen a number of incremental increases to buyer incentive programs by the various developers at Riverpark. Yes, there are some real expenses with living in this development that include Mello Roos and Oxnard City taxes, but my experience has been that these are nicely built homes at very competitive prices, even with the additional add-on expenses.

I was asked by a reader to comment on El Rio High School, floodplain issues and gangs in Oxnard areas near RiverPark. My answers are my own and do not reflect anyone else's views on these issues. Certainly, any potential homebuyer in East Oxnard will eventually face at least some of these considerations.

My daughter attends High School at El Rio and we have found their programs for college bound students to be outstanding. There are some possible new developments for students as well which include El Rio High becoming one of only two High Schools in Ventura County (Newbury Park High is the other) to qualify for an international student accelerated learning class this year. It should be fully instituted by next year.

Gangs are a problem in Oxnard, but there have been some very effective law enforcement initiatives taken in the last few years to cripple their influence.

RiverPark has it's own elementary and middle schools, a fire department and is building a modest shopping mall as well.

In order to address the flooding issues, I would recommend you contact the City of Oxnard Public Works Department, FEMA for flood plain maps at www.FEMA.gov or http://www.floodalert.fema.gov for a list of insurance companies that offer flood insurance in your area. You can find additional commments on flooding issues in my latest blog on my personal website http://www.markthorngren.com.

Should you buy now or wait. I'm a realtor. I'm supposed to say buy now. No, not really. I was just seeing if I could get a rise out of Schahrzad. Let's look at each possibility.

Buy later....or Buy now.
Home prices will most likely continue to fall for months if not years yet. My personal bet is some areas will turn around before others. Unless you know your neighborhoods intimately, you may have difficulty recognizing when it begins to happen. According to local title information (Land America Lawyers Title - Tom Piszczek - (805) 302-8667) home prices in Oxnard have gone down over 34% from March'07 to March '08, and 16% in Camarillo over the same time frame. Those are some pretty big numbers.

I always do a Comparative Market Analysis of my own for my clients. This is a one year look at a very specific neighborhood for any property my clients are interested in making an offer on. I find price trends, comparative home sale prices and listing information to base the offer or sale price for sellers and buyers needs.

Let us say that home prices continue down for at least another year. During the year we may see the buyers continue to take advantage of this market. Some of these folks are investors who are very savvy to our local markets.

In January my clients purchased a home listed for $600K in a neighborhood with a $604K median price. The sellers were motivated and my buyers made an offer for $450K plus $8,000 in closing costs. It was accepted! That is a 25% price reduction - almost a full years price drop right now!

Those are the kinds of deals that can happen in today's market. Does it always happen like that? No, but such a thing was unheard of a year ago. Will that type market last another year? Impossible to say.

Mortage programs are much more strict but progress has been made through FHA and CalHFA to make 100% financing still available to qualified first time home buyers. Very competitive rates are available through FHA for most other well-qualified individuals.

You should have yourself pre-approved with a lender you trust before you go looking for a home. If you don't know what you can afford, you are wasting your valuable time. Also,most realtors are not going to spend a lot of time driving people around at $4.00/gallon if they don't know what they are qualified to purchase or what program best fits their personal needs.

Get several Good Faith Estimates from different lenders and tell them what you are doing. Make them compete for your business! Watch you expenses and fees shrink as they try to lure you their way. Make sure the good faith estimates include pro-rated taxes, Title and Escrow fees. It is not uncommon to receive Good Faith Estimates that look very competitive until you realize they don't include all the normal expenses for your transaction. Ask your competing lenders to explain any differences in competing Good Faith Estimates. Sometimes your realtor can give you and idea of what is really happening as well.

FHA comforming loan limits have been raised from $417,000 to roughly $729,000 until December 31 of this year. There is great pressure being put on Congress to extend this deadline and it may indeed be extended. Hasn't happened yet but might. If it doesn't, FHA limits will probably default back to $417,000 next year. There are not very many single family detached homes available in California for less than $417,000.

We have no idea what interest rates will do over the next 12 months. That is a very fundamental gamble if you are undecided about when to buy. A very small interest rate change can have an immense effect on the interest you pay over 30 Years. That should be a concern to more people than just home prices.

I think you must give attention to your personal needs as well. There are many, many homes to pick from today. About 11 1/2 month supply in Ventura County. I looked online Thursday and saw that Oxnard - alone, had 1201 homes for sale.

This is a buyers market. It will continue to be a buyers market for months to come. When it changes, it will change gradually and at different times in different towns and neighborhoods. You won't easily see the change until you are past it. That is my thought on today's market. What do they say about a bird in the hand?

Warmest Regards,
Mark Thorngren
http://RealtyTimes.com/REUv/MarkThorngren or http://www.markthorngren.com
(805) 504-0228

Oxnard - Riverpark - 1,800 homes along the Santa Clara River

The largest new home development currently being built in Oxnard is Riverpark There are 15 different home plans by my count, located just North off the 101, along the banks of the Santa Clara River. HOA's vary by neighborhood, by square footage and by builder. Standard Pacific Homes is currently marketing the Celadon tract. Their HOAs can run from less than $100.00 up to nearly $300.00. There is also a 30 year Mello Roos which is about 1.1% but it is combined with a city special tax assessment. Agents in the development have told me to just multiply the Sale Price x 1.9 to get a rough idea of the combined total. Add the HOA and you will come close to your monthly fees. The HOA in the homes built by Standard Pacific Homes includes outside maintenance, landscaping and lender insurance - typically fire. Add these to your mortgage payment for your monthly housing costs. This does not include all utilities or your personal property insurance. Even with all the added costs, the homes tend to be very competitively priced with more floor space than I would expect. In one case that I know of, a home was offered for 70K below market with a special 6% give back at close of escrow. It was the last home in the tract and had fallen out of escrow previously. This was a nicely upgraded home in a nice location. Good things can happen. Call them to find out what is currently available or I can check for you if you prefer.
Shea Homes is offering the Market Street Tract of luxury townhomes. Plans 1 - 4 range in price from 486K for 2,362 sq ft to 545K for 2,631 sq ft. HOAs are up to $292 for Phase 2. This covers the Riverpark master association dues ($32) with the balance for Fire and Casualty Insurance of the building and exterior maintenance of the building. There is a property tax rate of 1.15% of the sale price, plus a Mello Roos Tax Assessment of $4,587 per year.
Several other tracts are still under construction. They have a new school opening there this Fall. There are very nice websitesq at http://www.riverparklife.com/ or www.standardpacifichomes.com or www.SheaHomes.com.
The tract names are:

· Celadon

· Destination

· Luminaria

· Market Street

· Promenade

· The Avenue

· Tradewinds

· Trellis

· Westerly

· Collage

· Meridian

· Morning View

· Veranda

· Waypoint

• Daybreak

May 10, 2008 | Mark J Thorngren

Some folks just seem to feel nothing good can happen this year in Real Estate. I feel that there have been positive things happening since January, especially for home buyers and property investors. Each month over the first quarter, we have seen a continued fall in home prices, generally low interest rates and increasing home sales.

No one can foretell the future, and it is likely these trends may weaken and strength again as the year progresses. We don't really see the kind of numbers that would indicate a full recovery is in place. However, there are some rather compelling indicators from a variety of sources that indicate continued positive pressures on our markets since the start of the year.

Nationwide, the Office of Federal Housing Enterprise Oversight is a Federal Government agency which tracks price movement in a portfolio of millions of homes financed & refinanced through Fannie Mae and Freddie Mac. OFHEO reported that in March'08 we experienced a six tenths percent gain in average home values nationwide. This is admittedly not a huge gain, but it is positive news for our market.

Of less widespread knowledge, is the fact that condominium sales jumped 3.7% in February, and 3.6% in March, Nationwide.

The Mortgage Bankers Association of America reports that thirty year fixed mortgages average 6.04% & 15 year mortgages average 5.6% for March'08.

According to Freddie Mac, ADJUSTABLE mortgage interest rates averaged 5.12%, down from 5.44% in March 2007.

The National Association of Realtors reported that the median price of home sales in March rose to $200,700. This is up from a revised $195,600 in February.

On the state level in California, The California Association of Realtors reports that for March'08, the median home price fell 1.3 percent compared to February'08. CAR also reports that the unsold inventory of homes in March'08 was at 11.6 months. That's a lot of homes and a lot of pressure on home sellers to compete for the attention of qualified buyers.

For those of you who do not trust CAR figures, DataQuick.com offers the following positive real estate trend information for buyers in California.

Sales in California are up 19.8% in March'08 from the previous month. Not surprisingly, 38.4% were foreclosure sales. Median home prices continue to fall in March, down from February's $373,000 and additional 4% to March's $358,000.

The following is a quote from Data Quick.
"Around half the drop in median is due to shifts in the types of homes selling, and how those homes are financed. Last month 14.4 % of the state's (California) financed home purchases were purchased with "jumbo loans" over $417,000. A year ago it was 38.4%.

The typical mortgage payment that home buyers committed themselves to paying last month (March'08)was $1,606. That was down from $1,665 in February'08, and down from $2,230 for March a year ago.

Adjusted for inflation, mortgage payments are back to where they were four years ago. They are 20.3%below the Spring 1989 peak of the prior real estate cycle. They are 35.7% below the current cycle's peak of June 2006."

Locally, CAR indicates Ventura County home sales increased for the third straight month by 15.7%in March over February's sales. The percent change in sales price is down once again by 3.1% in March. The median home price in Ventura County fell an amazing 25% from Mar'07 at $672,550 to Mar'08at $504,210.

These are not very encouraging numbers if you are a seller. There are likely many months more of falling home prices & restrictive loan requirements.
However, for qualified home buyers, the low interest rates, huge home selection and considerably reduced home prices are providing some remarkable opportunities.

May 6, 2008 9:17 PM

Sunday, April 27, 2008

When my family first moved into Camarillo back in 1998, the city was experiencing widespread flooding from "La Neina". The rains were heavy for weeks at a time and many of the lower elevations around town were suffering. Since that time many extensive flood control projects have been carried out around the county.

Notable among the projects was a thorough clean up and channeling of the Calleguas Creek. This creek had overflowed in several locations where roads crossed it. The bridge embankments were too narrow and had caused the creek to back up at several locations. New bridge construction and a host of other improvements have greatly eased the risk of flooding in Camarillo.

Despite these improvements, FEMA went ahead and redrew flood maps for our city which include diagrams of areas likely to flood over a 100 year time frame. FEMA has expanded the flood areas to include a new, even less likely area of flooding called the 500 year flood area.

The City of Camarillo which has spent a great deal of it's resources to protect itself from flooding, has been understandably concerned about FEMA's new maps. The city has worked to provide homeowners with a better understanding of the effects the new maps may have on the need for and the cost of insuring their homes because of FEMA's new maps.

Insurance companies often require homeowners to carry flood insurance according to the way these FEMA maps are drawn. Insurance can run from around $300 to upwards of $2,000 per year and is normally required for Federal or federally related mortgage financing.

I have copied and scanned some of the literature the City of Camarillo distributed during 2006 in response to FEMA's new maps. I would be happy to email these to anyone with an interest in their property status.

The long and short of it all appears to be that if you live in one of the mapped areas, you would be well-advised to contact the City of Camarillo, FEMA and your home insurer to determine how each will treat your property. Contact information for City of Camarillo - Public Works Department Ph (805) 388-5340 or www.ci.camarillo.ca.us. FEMA - John Magnotti at (202) 646-3932 or john.magnotti@fema.gov or www.fema.gov/mit/tsd.

Warmest Regards,
Mark Thorngren

http://www.markthorngren.com & http://realtytimes.com/REUv/MarkThorngren