HOA ‘Backlash’ Against Speculators In Idaho
The Idaho Stateman has this report on the local reaction to speculators. “Some homeowners associations in Meridian are looking to limit the number of rental homes in their subdivisions in an apparent backlash against outside investors snapping up Treasure Valley real estate.”
“In the past couple years, property investors from California and other states..bought homes throughout the Valley. In the first nine months of 2005, Boise ranked fourth highest in the nation for the share of home loans taken out by investors, according to LoanPerformance.”
“At least one HOA in Meridian changed its covenants to limit rentals while others are exploring fines and enforcement to force rental property upkeep.”
“Last month, homeowners in Meridian’s Mid-Town Square voted to allow only 20 percent of rentals in its small subdivision. The HOA board was concerned off-site owners might not maintain their properties to subdivision standards, said president Claudia Most.”
“‘Our real intent was to try to kind of nip it in the bud up front, rather than trying to enforce it,’ Most said. ‘What we intended to do is protect property values in the neighborhood.’”
“And one local developer simply won’t sell to investors anymore. Don Hubble said his company, one of the largest homebuilders in the county, stopped selling to outside investors about a year ago. It was an unpopular decision with investors, he said.”
“The company’s decision came at a time when the market was hot and investors were coming from around the country to buy local property.”
“Other Meridian HOAs also are looking at legal ways to limit the number of rentals said Bonnie Speas, who works for AMI property management. ‘The biggest problem I am seeing as a neighborhood manager with rental properties (is) a lot of the homeowners are out of state and they are not aware of what is happening at their property,’ Speas said.”
Although it probably isn’t legal, it is an interesting turn of events. Still, if these HOA’s succeed it won’t likely preserve the value, but lower it. After all, what do they suppose a flipper will do if he/she can’t even rent the thing? IMO, once these flippers are in the subdivision, they are stuck with them.
I doubt any of the flippers have the motivation or wherewithall to hire counsel to determine before a trier of fact if it is illegal. Most of them don’t appear to have enough cash to buy a six pack of beer, much less 100 hours @ 200/per minimum.
Speaking of that, good luck to Rudekarl taking the bar in Florida. Be careful what you ask for, my friend . . . . lol
They will have to go public defender in Boise, ID. That is funny! I can see the old guy with the bow tie escorting his client to the defense table and asking “now what is your name and what crime did you commit? My memory isn’t what it used to be…”. LOL
They are doing this legally in Las Vegas. Happened to me at one house I bought 5 years ago. The HOA has sighted my tennant every month for some really minor infraction, and made me make my front and back yard conform to HOA standards they just passed this year. Also, a condo I own passed a resolution charging all rentals $25.00 additional per month beyound what the owners pay. Passed 1 year after I bought property. These guys set the rules as they go, and somehow everything they want becomes legal
I imagine that they only need a majority or supermajority of homeowners.
David — the HOA cannot cite a tenant for infractions of rules that don’t exist. Condos are a different animal much different animal from SFR HOAs in that, normally, a supermajority of condo owners can pass “new” rules in the form of amending their constitution and/or bylaws. Even then, the state may protect current owners from arbitrary changes and in Florida, for example, it is common for existing owners to be grandfathered out of the new rule for, for example, the duration of a current lease. That said, I think you’d find that most state laws are reasonably protective of owners with regard HOA rules changes. Finally, as a tenant, you need to be versant with the current condo “docs,” because a wily landlord might B.S. you about “rules” that don’t exist.
Crappy sentences on that post, but the commas will help you through them.
Even if it wasn’t legal, you could still make life miserable for investors by making little requirements on all homeowners that would be difficult for investors to carry out without frequently being at the property.
As far as property valuations go, it may be that the goal is to improve or maintain the quality of life instead of maintaining the dollar values on the properties.
The lenders use to keep the amount of investment property purchases down by making more requirements for the investor ,(which was legal based on risk ). The lenders required higher down payments, wouldn’t make loans in projects that exceeded a certain amount of rentals,etc.
Don’t exactly know if it’s legal for a homeowners association /or developer to limit non-owners occupied purchases unless its in the CCR”S .
I know you have the over 55 year old projects that has age limits . Somebody was telling me the other day that a person under 55 can buy in a over 55 project ,but they just can’t live in the 55 or over project ,unless they are over 55 years of age,( I guess it depends on the CCR’s) .
Buy anyway , its the easy credit ,easy money , housing boom , situation that has created the over amount of investors in new projects . It has become a problem for builders because people who really want to live in the projects don’t want to live in ghost town surrounded by for sale signs from flippers .
It is true that rentals can be the least cared for homes in developments and it gets worst if the landlord lives out of state .(No offense to good renters or landloards that take good care of the property ).
Sorry…. landlords not landloards
Wiz — at least it wasn’t “landlards.”
It is perfectly legal. In fact, Freddie and Fannie used to refuse to lend in projects that exceeded x% NOO (they may still, but it has been so long since I have dealt with a conforming loan). Some jumbo lenders did the same. It protects the value of the units by enabling owners to finance and refinance.
That’s what I’m saying , it was the lenders that would limit the amount of investors in a project , not the HOA’s or the builder or the sellers . Of course a property can start out being a owner-occupied dwelling than become a rental after a while .
IMHO , you really can’t prevent that owner from renting .
In other words ,projects can go for years and be a high owner-occupied count and than change to a high rental count with time as the complex ages . Or you can go from a high investor count to becoming a high owner occupied count .
The more expensive a complex becomes , it tends to limit the investor count because of the price .
In other words ,its more likely to see a higher ratio of investors in the cheaper developments ,( however in this crazy market you are seeing all kinds of crazy ratios .)
There are many, many HOA CC&Rs that limit the percentage of NOO units.
Here in Florida, at least, the more expensive a condo becomes, the nuttier it is to want to be a landlord in it. There is a ceiling on rents that people will pay for condos and the latest iteration of luxo condos has created ownership costs that make renting a totally losing proposition. Aweful negative cash flow and, now, dismal prospects for capital gains.
I think it’s not so much preserving the monetary value as not wanting renter’s around.
And thanks to the reader who sent in this link.
I suspect that Ben is right on the mark — that it is not legal. In Florida, at least, I believe rental restrictions must be in the covenants that run with the land — the deed restrictions. Local ordinances would trump any deed restrictions and in Florida are most noticeable, and most enforced, in condos.
Someone’s gotta pay the mouthpiece to institute an action though.
I wonder, though, would it be legal for an HOA to pass a bylaw like, “The owner must dedicate two days a month to performing common area chore X,” which would clearly be impossible for an out of state investor?
Others are noting how it’s costly to get a lawyer to handle this, but won’t just one flipper/investor need to spend the time/money? Once there’s a precedent, you’d think any future investor could just have a lawyer send a letter to the HOA saying, “Remove this bylaw, as it’s illegal, or I’ll sue the HOA for what a renter would have netted me.”
Non-occupant owners are not a protected group, and thus can be discriminated against. Best story of discrimination EVER: small developer built a small condo project and refused to sell to buyers that were laywers, maintaining that a lawyer was more likely to sue him. A spurned lawyer/buyer sued him (proving him right, eh?). Court ruled in developer’s favor, since lawyers are not a protected group.
Interesting case ,what state was this lawsuit in ?
California I believe.
I’ve noticed that apartment complexes near universities sometimes state quite openly in their publicity material that they don’t rent to law students. No doubt the owners consider law students more likely to exploit loopholes in the lease or sue. The first time I saw this, I was amazed that they were so brazen about it, since it seemed to invite a lawsuit in itself, but I’m guessing that the principle has already been challenged in court and upheld.
Slick. Gotcha.
Don’t forget that the tread began with a discussion of HOA rules in a single-family homes subdivision, not a condo. Huge difference in every respect imaginable.
Well, well….if some of the long time readers remember, I brought this very subject up some time ago, and Housing Wizard concured with my sentiment. CC&Rs (Convenants, Conditions and Restrictions) is the rules and regs of a multi-family community (condos and such). They control what you can do and not do with your unit and in the community. My experience is that many (if not most) of them used to clearly restrict the % of units that could be rentals. Since this market has blown its stack, all of those rules seemed to have gone out of the window or were completely ignored….thus, you have many communities (be it SFH, high-rise condos, whatever) that are bordering on empty. Bought with the intent of flipping. There are now high-rise condo buildings with almost no lights on at night, few cars in the parking lots, and a garden of For Sale signs.
I am NOT surprised that HOAs are trying to get a handle on things. I can’t speak to the legality of making the change as I have not sat on a board, but if they can pull this off we will see a LOT of changes in how RE is purchased (or not purchased).
BayQT~
So much for the ‘freedom’ of homeownership. I thought the reason that renting was so ‘bad’ is that you don’t have the freedom to do what you want with your place. I guess that argument sucks.
Well, you voluntarily enter into the homeowners agreement. And things can change due to the wishes of the majority. In many ways, this is like town government.
I also voluntarily enter into the renter’s agreement when I rent. And if things change for the worse, all I have to do is give 30 days notice and drive a Uhaul a couple of miles.
Not if you rent from me. I won’t accept MTM tenants.
Not if you rent from me. I won’t accept MTM tenants.
Interesting you mention that. Lately I’ve noticed a pretty large spike in the number of MTM no-lease rentals listed on the L.A. Craigslist, WestSideRentals.com, etc. Most of them are pretty nice looking SFRs or townhouses/condos, no doubt in the process of trying to be sold by flippers. Some of them are nice/cheap enough I’ve considered moving myself.
Well, there’s two conflicting motivations here: one) quality of life, two) property values. As was mentioned, such restrictions will almost certainly LOWER property values, as we all know it’s the flippers who drive prices. In the very, very long run, improving the quality of life will raise values, but probably from much lower levels 10 years from now.
In the short term, they are all fubar’d. Flippers and the homeowners. Don’t think they couldn’t have seen this coming. No sympathy here.
What us bottom feeders need to be careful of is the bargain basement prices in several years. When a house in a new, nice neighborhood can be purchased below cost — many of the new owners can’t afford the upkeep. A few years of slack maintence and a nice neighborhood quickly becomes crappy neighborhood. It happened in the 80s. It will certainly happen again, and probably much worse this time.
When bargain hunting, stay out of new developments. period.
It may lower or raise values. There are a lot of banks that won’t lend on condos with over a certain percentage of renters. Therefore if there is high rental ownership, new buyers cannot get loans on them.
Remember too that covenants can apply to single-family neighborhoods. In the condos where the rules were ignored for a long time, any newbie who crosses the line has, I’d imagine, a pretty good case for citing prior non-enforcement.
Condo boards bark a lot, but most of them are spineless when dawn breaks and it’s time for battle. I have seen firsthand several cases of blatant violations being overlooked because none of the elected (as in, volunteer - crap, why did I run for this?) board members want to confront a feisty owner. In the end, the best results come from consistent fairness and impartiality. But that is what we teach our children when they are small and it breaks down oh, about every other day.
One HOA I was in took advantage by charging a yearly fee to rent your unit and demanding a yearly lease be signed and given to HOA. They also tried to nail me with a $50 fee to re-key the mailbox every time a tenant moved but that was a quick home depot fix of $5 for a whole new lock. I’m also noticing that HOA’s are getting quicker to fine landlords on baloney like having a weed in the yard type of violation. They seem to think harassing landlords is a good thing.
I bet they don’t pass the profits they get from the rental units back to the homeowners either.
A friend handles computer work for a HOA. They have an office with a 3 station LAN, internet connectivity, all this overhead to publish a newsletter and cry about unkept lawns. Pretty bizzare to me.
I have been mulling over this subject for a while. In our last neighborhood, for example, were were renters of a new home. We were tolerated but never welcomed to join the neighborhood club around us, and the HOA President told us he wished they could say “no renters”. (Which was kind of silly, because he disliked our landlord vehemently, but was friendly with us).
And the truth is that when investors grab all the property, it drives up prices for those who otherwise would have bought (and now instead are renting).
The best way to discourage landlords is probably through the tax system.
Sigh - dilemma - I’m all for free markets but don’t like the idea of Pottersvilles everywhere, either.
Have you by chance heard of Henry George?
Reading about Mr. George led me to this:
http://www.marylandlandtax.org/
“The current property tax has glaring and insurmountable problems: Businesses and homeowners who keep their property in good repair are penalized.”
My father lets his house on the farm look like a wreck (outside) to avoid high property taxes on the dwelling
When I was in the Army long, long ago, I was stationed in Germany. I was amazed at how many houses were complete except for stucco and paint — they were the ugliest gray concrete block structures imaginable. The reason why was simple enough — property taxes on a completed structure were much higher than on an incomplete one. So for as long as one was allowed to be “under construction,” many Germans left their houses almost-done, to the great detriment of the view their neighbors were afforded. If there is a loophole, great numbers will find it and, if they can, use it. I suppose there must be a Bubblefucious way to say that.
I’m sure that’s part of why they sat without stucco for months on end, but the main reason is that a new house must settle for up to two years (depending on the ground characteristics) before stuccoing it is a good idea. If you do it too soon, the stucco will crack, fall off in pieces and look awful.
Bavarians (and other Germans) do not build crap houses like seem to be the rage back home. New Texas subdivisions = 99% crap.
Our home in Boise was purchased by an investor from out of state last summer when we moved back to Portland. The HOA really did keep the neighborhood in top notch shape. I always wondered if the new owner has been able to keep up compliance with the covenants. You would receive a letter if your grass had too many weeds or was brown, if you had a portable basketball hoop in the front yard, your car parked in the street more than 48 hours, etc.
It must be a real headache for the HOA to deal with an out of state landlord.
what subdivision?
I think this problem will self correct in Boise. There are many speculators loosing there shirt out here right now.
Mill Creek.
“It must be a real headache for the HOA to deal with an out of state landlord.”
Perhaps. I live in CA but have owned a townhouse in Newport News, VA that I’ve rented out since 1999. I’ve never lived in it…it was a 1031 exchange and I got more bang for my buck there than in CA. My grand plan was to be in the black, not red. At the time, a friend of mine was going to rent from me (a former Bay Area resident) but all of her ducks didn’t line up ….I had to buy anyway and time was running out.
(For those of you who are not familiar: a 1031 exchange is a vehicle that allows you to defer capital gains taxes and it is timed (a certain amt of time to identify 3 properties, and then a certain amt of time to close on property you chose to buy…if the buyer succeeds, he/she won’t have to pay taxes on capital gains until the final sale of a 1031 property. If not, dear Uncle Sam sends you a bill for the capital gains owned.)
In the 7 yrs that I’ve owned the property, I’ve only received 2 letters requesting that I make some sort of repair or maintenance. Nothing unreasonable. I have a property management team out there so I defer to them and they take care of whatever it is. I know there are some horror stories out there about bad property managers, but I have been EXTREMELY lucky….I would gladly refer friends to them (and have).
BayQT~
Beware, O renters of FB’s!!! I just spoke with another (yes, another) renter whose landlord took the rent and security deposit and absquatulated before being foreclosed. The bank then sent the honest tenant an eviction notice. This is most likely money which the tenant will never see again. Fortunately for this particular tenant, there was a “cash for keys” deal which helped him or her relocate.
And they scored a trunk full of light fixtures and a toilet!
Those are good points, thanks. It would seem it is the presence of dis-interested/empty-pocketed flippers that is the problem, not renters.
I am curious about the law on this. When you sell a rental unit, the new owner is subject to the terms of the lease, but if a bank repossesses, it can just evict tenants?
Can’t tell you for every state, but in Virginia, your contract is with the person who owns the property (the landlord) whose entire interest is subject to the Deed of Trust which they signed to secure the Note. The renter can only rent what the landlord has, and everything the landlord has is subject to the Deed of Trust. If the DOT gets foreclosed, so does everything else down the chain. You may have enforceable rights or remedies against the landlord, who is clearly in breach of their warranties under the lease, but you have no contractual rights against the foreclosing lender. So, yes, they can evict you.
This happened to me several years ago in Sacramento. The owners were not paying the mortgage co but I was still paying rent. I found out about this early on and called the bank. They said continue to pay the owner. The owner tried to sell the place without any luck. I was able to lower my rent due to inconvenience and stress - quite a bit actually. It took almost a year for the entire process. I received an eviction notice to leave in 30 days.
I’m sure there will be lots of these in the future.
Do you remember when I was warning people about renting from up-side-down flippers that they would try to steal the deposit .Renters need to be careful who they rent from in this crazy market .
Maybe renters of flippers should get a security deposit from the flipper.
LOL, it would be a good idea .
Aren’t security deposts are supposed to be held in escrow in some states?
If so couldnt you take an owner to small claims?
Or if you know they are an upside down flipper, plan on not seeing that deposit and just don’t pay your last month’s rent and wait for the eviction. You might come out ahead.
What your suppose to do and what a flipper ends up doing out of desperation is two different things .What if the flipper landlord lives out of state from the rental property ? Good luck in going to small claims court and getting a judgement that you can collect on .
I just think that maybe renters need to investigate the Landlord a little in this day and age and make sure they are solvent .You can look on Zillow and see a property history on the house you want to rent .
I thought by law in many places deposit must be held in escrow.
This is the exact reason why I have not even bothered to look at all of these beautiful huge homes for rent for such small prices. It would cost me a couple grand to move, with no guarantee that they won’t be foreclosing before my lease is up. Thanks, but no thanks.
Disillusioned — good point. Me, I’d do a modest bit of Sherlock Holmes’ing before I gave up, but you probably are right for a scary percentage of the good-looking deals.
Not to mention - brand-new houses are a pain to rent. Every ding is yours to pay for according to a newbie flopper landlord.
This seems illegal to me–treating rental properties and out-of-state owners differently by the HOA.
Of course, there’s nothing to stop them from going nuts with fines and other restrictions if the lawn is not mowed or if the rental looks shabby.
One more thing. What about fining an owner for non-occupancy? Seems to me that an unoccupied dwelling is far worse than a rented dwelling.
I find it hilarious that all of these “investors” put little or no money down, they always use a mortgage(usually two or three), and they think they can create infinite wealth for themselves in this way. I hope all this liquidity dries up soon and the speculators go to jail for mortgage fraud.
…stopped selling to outside investors about a year ago. It was an unpopular decision with investors, he said.”
I call this BS. I have never seen a builder turn down a buyer! They just called them 2nd homes.
I agree. If you go onto Craigslist and look at properties that are obviously bought by flippers “new never lived in, completed February 06″. Then go into the county records and the owner is always listed as “owner occupied” I guess they went in to a new development and lied that they were going to live in the house.
ahhh good old Tax Fraud to go with their BK’s.
I wish local tax offices would offer a bounty for tips leading to the “correction of a misunderstanding about the residency status of an owner and the payment of taxes due.” While I hate property taxes, I hate worse that people cheat to get out of their share.
Out-of-Stater’s usually will call it a second home due to the advantage of getting better pricing on rates and higher quality loan programs over those that they would’ve have had to take if it had been called an investment/rental property. All you have to do is find a loan officer to go along with it and you’re in.
The place I’m renting is listed as owner occupied @ the county assessor
I’m not surprised. So many realize how bad the rules have been bent and tweaked in the lending, but really it’s much worse than you think.
But you can’t call it a second home if you are a first time buyer…having no other property in your name, correct? So those people have probably gone with the bogus declaration of owner-occupied…and no one checked on them.
Hmmm…speaking of that. If you go under contract as an owner-occupied buyer, but you don’t live in it, is there a watchdog org to sniff these folks out? Any legal ramifications? I’m thinking the answer is “no”, or we would have seen other kinds of stories in the media.
BayQT~
The Arizona Republic, if memory serves, did a story where THEY took the time to research a bunch of properties to see if they were really owner-occupied as declared on the mortgage docs … and of course, none of them were. They had a quote from some guy who owned, like, 10 “owner-occupied” houses. It was great fun reading it and seeing the “ahh….er….ah” quote from the owner. wonder if his lenders ever chased him down and called their notes.
Wow, Mike…do you think you could find the link to that story. That’s VERY interesting! Thanks for the post.
BayQT~
Some loan notes use to say that the loan could be called by the lender if it wasn’t owner occupied . (When a loan is called ,the lender give a specific amount of time to pay the loan off ,(90 days,etc. )or get a new loan .)I know someone who got a loan about 12 years ago that stated that the property could not be rented out , or the note could be called ,(it was a special interest rate for first time buyers ). Also in the that note it said that the buyer had to occupy the property for 7 years or pay a hugh pre-payment penalty .
The loan officer advised my friend that the lender/funder would check the utility bills to confirm owner occupant from time to time .
There are all kinds of clauses in alot of loan notes that the lender could assert their contractual rights if they wanted to . I was reading a clause in a loan note once that said
in essence that the lender had the right to make the borrower clean up the property ,or make them correct any health and safety violations .
Thanks Wiz. So it looks like the option is there for the lender/funder to put those kinds of stipulations in the contract…AND for them to be able to call them in if someone reneged.
Now, I guess we get to see how long it will take any of them to actually take some kind of action. Maybe there *will* be stories reflecting such in the media before it’s all over.
Thanks again, Wiz. Both Mike’s reference and your explanations are very informative. I think, too, that this kind of information will be helpful for people sitting on the fence, about to pull the trigger or were NOT aware of this kind of conditions can be put in a note. Read all the fine print people….take someone along with you to help you read it all if necessary.
BayQT~
Another loan note clause I saw was the lender was requiring earthquake insurance ,( the funders were from back East and they wouldn’t loan unless they had that requirement on California property ). Course this was back in 1995 around that time .
I think these HOAs are shooting themselves in their collective hooves.
If the units cannot be rented out, they are that much more likely to be foreclosed or abandonded, thus driving down the price of the owner-occupied units. Good luck collecting the HOA from a bank REO department or a bankrupt flopper. So the remaining owners will have to raise their own HOA, thus making their own position vis-s-vis their mortgage that much less tenable.
Ready, Fire, Aim!
Or worse of all, the landlord flopper might decide to move in and become the new neighbor.
I laughing now, because I know this is true by personal knowledge!
It goes back to the lenders funding investment properties for people that can’t afford to do anything but a quick flip . If flippers turn into landlords ,they won’t be the best ,and it will create headaches for HOA in enforcements of the CCR’s .
While the flippers drove up the prices for a long time , they now have the potential to drive down the prices in any given tract if there is to many of them . So this is another good reason not to buy right now until all the dust settles and it becomes more of a end-user stable type market .
Some things are more import than preserving home values. Would you rather live in a safe, quiet fully occupied neighborhood where the houses cost 25% less, or a more expensive neighborhood where some houses are poorly maintained and have a constant string of tennants moving in and out?
Prohibiting rentals lowers the value of the homes, but improves the quality of the neighborhood.
If you see a house a a place to live, lower cost for a better neighborhood is a benefit.
Would you rather live in a safe, quiet fully occupied neighborhood where the houses cost 25% less, or a more expensive neighborhood where some houses are poorly maintained and have a constant string of tennants moving in and out?
Prohibiting rentals lowers the value of the homes, but improves the quality of the neighborhood.
A 25% home price drop puts a lot of speculators, FBs and unwise equity-extractors badly underwater, and homes will be vacated, whether they sell or not. There are reasons beyond simple price that many of these may fail to sell. Larger houses are also more expensive to heat, cool, insure, maintain, etc. I suspect that a lot of cheap throw-up homes, mini-mansions included, will become very obviously depreciating assets (not just deflating but quickly losing value relative to new builds.) *Especially* if they sit empty for any period of time while the paper holders dither over how to unload.
I’d rather live in a higher density neighborhood where the multi-family unit rehabs were under permit and the rentals are above board, than one with the extended “family” of 26 violating the fire code and all sorts of questionable chop jobs…or homes sitting empty and HOAs/municipalities with inadequate revenue to “keep up appearances” or drive off squatters and other undesirables.
The lawyers should all get down and thank their lucky stars for this housing bubble. Not only will it provide them with an endless source of clients and litigation on all sides of this mess but they also moved up at least three notches in the area of public opinion ahead of speculators, builders, realtors, and mortgage brokers. They also gained a fan in old Mort here. Go team go!
Read about House being auctioned in Dana Point this Sunday.
This home was bought in March 2005 for 825,000. The starting bid is 699,000. I wonder how it will go. Do you think this is a FB?
I was just reading the specs on this house. They claim that it was remodeled in 2006 which includes new dual paned windows. On Realtor.com, a house in the neighborhood is listing a range between $860 and $899K; another between $865 and $875k. I really don’t understand the range thing…..I would think that any prospective buyer could come in and offer below asking. Are the sellers calling themselves giving you “permission” to do so?
Interesting….
BayQT~
Not exactly San Diego but still California. This is Ventura County. I literally just had a realtors single sheet “flyer” left on my doorstep. House #1: $865,000 reduced to $840,000. House #2: $769,000 reduced to $739,000. Actually, I will buy because I can easily afford either of these two houses having sold a townhouse in Northridge Ca, and a condo in West Hollywood, Ca. However, “WILL buy” is the operative wording. These houses are renting (similar kind in same area) for $2,400 a mnth. That means, these properties are worth between $400,000 - $450,00. I fully expect that level of value to be reached in about 18 quarters. By then we should see “blood on the streets”. Then, and ONLY then, will it be time to buy. Of course, there will be dip buyers all the way down who will get stuck as the values hit support, rise to resistance, drop again and cut through support which then becomes resistance. Anyone who buys now and anyone who bought since 2003 is going to be underwater in the next few years. How do I know that? The fake low Greenspan interest rates which suckered in the masses, were simply used to recover assets lost in the 2000 stock market bubble burst. The smart money switched to buying builders stocks and any 6 year chart of BZH, RYL, LEN, etc, proves it. Main stock market hit bottom and house builders stocks started to go up big time. Now the next bubble is being worked on by smart money and the home builders like BZH, Ryl, Len, etc, are going to get flushed down the toilet. What’s the next bubble? It hasn’t shown up yet but it will if you know how to read a stock market chart.
“Some homeowners associations in Meridian are looking to limit the number of rental homes in their subdivisions in an apparent backlash against outside investors snapping up Treasure Valley real estate.”
Shades of FBs in New York Coops in the 1980s. They had two kids in a one bedroom, couldn’t sell, and wanted out — at least to a bigger rental. The board still wanted to be snooty and keep out tenants, or at least approve them.
Seeing this happen to friends, I decided a libertarian is a liberal who has been mugged by a Coop Board.”
Actually the post about quality of life is true. When I buy again maybe 08 or 09 here in Wash, DC. It will be coop not condo. Coops strictly limit rentals 0 often a year’s limit every other year or if you go overseas for work. Would rather have neighbors who have a stake in the place. Sure there are lots of good tennants including me but when in comes to putting $ into a place, I don’t even want the chance of partying college kids etc… as neighbors.
The lawyers should all get down and thank their lucky stars for this housing bubble
————————————————————————–
Boy, you got that right! Lawyers are already salivating at the prospect of representing FB’s here in the OC. For example, I always think about the local mortgage broker I know of who “helped” one of my clients obtain a six-figure HELOC by creating a fictious job for the clients spouse. Now that the HELOC is running at 9.1% (with an $ 80 k balance) it’s time to bring in Perry Mason.
HOAs are a ticking timebomb, and another reason why houses today are overvalued.
With an HOA, you really don’t own your property! If you have to ask some old biddy on the “Review Board” every time you want to paint your house, or get fined for having a basketball hoop, what kind of ownership is that?
When I wanted to move to florida, I spent about a year trying to find a home that was unencumbered with CC&Rs and HOAs. I wasn’t able to! It turns out that most counties MANDATE HOAs for new developments!
I ended up having to buy a large parcel (20 acres!) outside of any development in order to be free.
But now I know I can take my trashcans out when I want, fly an American Flag, or have a basketball hoop without anyone telling me I can’t.
If you have an HOA, you don’t own your home! And if you were stupid enough to buy a home in a deed-restricted community, you deserve to get what you’ve got!
Robert — Merritt Island might be for you. There is no city, for starters — it is all county. And if there are any rules about how you can use or abuse your property, they probably are looser than most any place in Florida. There is a lot of waterfront property there, since it is bounded by the Indian River and the Banana River, and the state and feds have a tight grip on stuff like building docks. But if you want to pull the engine of your Jeep in your driveway, it might be the place for you. Otherwise, give Dixie County a shot — if you aren’t a Yankee. The “armpit” counties still are pretty sparsely populated, loose and free. There’s something for everybody in Florida, if you are willing to go find it.
This is what I can’t understand. I thought Americans believed in property rights. An HOA is just a vigilante government enforcing petty rules and restrictions on the enjoyment of your property, that would result in a revolution if a city or county government tried the same thing.
The same people who would go ballistic if the government tried to take the free use of their guns away allow an HOA “government” to take the free use of their houses away. Sheeple indeed.
This has been a pretty wild thread, relative to recent ones. I suspect that it has to do with the great variance in laws among the states with regard to landlord/tenant/HOA rights (similar to the difference in divorce laws), and to the just-as-great difference between HOA rules as pertain to subdivisions versus multi-family dwellings.
“Some homeowners associations in Meridian are looking to limit the number of rental homes in their subdivisions in an apparent backlash against outside investors snapping up Treasure Valley real estate.”
Woo Hoo! Rewind to 2 years ago cocktail parties of equity locusts talking about how rich they are going to be in their Cal homes. Then a year later when they decide to cash out of Cal and buy 2 or 3 condos in Boise, rent them out, and clean up. Then BOOM. HOA rules! HA! I LOVE IT!
Some people want the rules of a HOA in a development . If you buy into one of these developments you should read the CCR’s so you get a idea of the rules .(Always make your offer subject to review of the CCR’s ).