Local Interest

Today we learned the news that our long-time A-list Scripps Ranch handyman, Jim Reed, passed away this past week. His granddaughter tells us that he died peacefully in his sleep while attending a family funeral in Denver. Steve and I feel like we have lost a member of our own family.

I say that Jim was our A-lister, but the reality is that he was the only name on our list. For almost as long as we have been in real estate, Jim has been a fixture in our clients’ homes and in our own. He did what he did primarily because he loved what he did. When he had knee replacement surgery last year, he took all of one month off before he was on the top rung of a ladder in our living room (the one that says “This is not a step!”) installing our new ceiling fan.

His hourly rate was well below market, but Jim made up for it with hours. He was a “visitor,” and each job was about one-half work and one-half conversation. On days when I was busiest, I avoided eye contact, knowing that the meter was running and I might be finding myself pulling up a bar stool to swap stories.  I invariably ended up swapping stories regardless. Jim was one of the kindest, sincerest people you could ever meet, and it was hard to say no.

We understand that his family is with him in Denver today. We pray he is at peace. Finding ourselves short on words, we have decided to rerun this post originally published by Steve in May, 2007, in his honor.ландшафт Our deepest prayers go out to his family.

As real estate agents we have a wide array of technical tools available to make ourselves more effective today - laptops, notebooks, Blackberries, and Treos to name a few. We also have an arsenal that includes e-mail, web sites, digital pictures, video tours, podcasts, blogs, and much more. We can literally expose properties to the world.

But for many transactions it’s the simpler, back to the basics type of assets that we need to bring to bear. Once a purchase agreement is consummated, the due diligence period begins. Virtually every home is professionally inspected and since inspectors have a secret agreement to always find something, if not many things, wrong (it’s in their oath when they become inspectors), a request for repairs list is commonly presented to the seller. If the items are agreed upon the transaction moves forward. If not, the transaction may be a risk.

So, notwithstanding all of today’s technology, in many cases the success or failure of a transaction is defined by how well you can negotiate and execute the repair list. Regardless of who is responsible for whatever repairs are agreed upon, it is common that some “punch list” items are beyond the capability or desire of the buyer or seller to complete, but they may not be significant enough to need a licensed vendor such as a plumber, electrician, appliance guy, etc. In most cases, the buyer and/or seller look to their agent to arrange for these items to be resolved.

Enter the Handyman. More specifically, in this case the Scripps Ranch Handyman, Jim Reed. Yes, the good ol’ handyman. It is increasingly rare to be able to find a really good one; one who is a professional and who you, as the agent, can count on to fix a wide range of deficiencies in the home, know the building code, do it right (in many cases better than the licensed vendor) and not charge $100+ just to show up. I fear the handyman is a rare and threatened breed.

After many years of trying to refine our skills as agents and to acquire new skills, we have come to appreciate the value of such a talented individual. Kris and I don’t promote our stable of vendors very often (ever). Our best are already in great demand. But in this case we have someone who is approaching icon status. Take the top five or six agents that work the Scripps Ranch market and combine all of the homes they have entered over the years and it still doesn’t approach the number that Jim Reed has seen - and “fixed.”

Amazingly, almost every home we sell in Scripps is one that Jim has not only been in for the existing owner, but also for the two or three prior owners. He knows the whole history of so many homes, it’s ridiculous. And he has great stories. I guess since he has been doing this for so long, he knows where all the skeletons are buried, so to speak.

But, like anybody who has done anything for 35 years, Jim is starting to slow down. After each job, I meet with him at the back of his truck where he sits on his bumper to rest and we discuss how the job went. His knees are a problem and he is stalling on getting needed knee replacement operations - for both. Selfishly, I don’t know what I would do if he was out of commission for 6 to 8 weeks. May as well shut down, or ask Kris to give my power tools back.

What’s funny is that every month we see his little ad in the classified section of the Scripps Ranch Newsletter - “Scripps Ranch Handyman. One call does it all!” Why he runs this ad, I’ll never know. Jim is always booked up for weeks or even months at a time. And generally, he will not do work in other communities. Why? Because he doesn’t have to. That, and because (he proudly tells us this) his truck gets about 6 miles to the gallon. I had to practically beg him to do some work for a property I sold in Pacific Beach a few months ago. When there he was telling me stories and pointing in various directions of homes he had done in PB in past decades. Not anymore, except for my begging.

Jim’s office is his truck. When he raises the back panel, you are immediately impressed with the notion that Home Depot has thrown up inside. Every imaginable tool and spare part one could need to rebuild the Parthenon is on display, and those spare parts have saved our sellers and their repair projects more than a few times.

Our Scripps Ranch Handyman is incredibly good at what he does, but I get the sense his work is not about the money, at least not at this point. He loves the work, but mostly he loves the people. And, after all, this is a people business.

Hat tip to Benn at Agent Genius for directing me to RockYou, a super-cool site for creating slide shows. I put together this montage of Scripps Ranch photos I had hanging out in my hard drive. Now I just need to figure out what to do with it.

(Edited to note that while the music was nice, it was driving me crazy, and it occurred to me that the music would be playing each time someone accessed our front page in perpetuity. Therefore, the soundtrack has been nuked.)

I got a little suspicous when I first posted this Altos chart showing the Market Action Index (less than 30 suggests a buyer’s market, duh) and weekly absorption (homes opening escrow) for Scripps Ranch. Specifically, this data shows Scripps Ranch detached homes going into escrow at a clip of approximately 8 to 10 per week, yet I know that we aren’t closing 40 homes a month.

My own experience tells me why we are seeing a discrepancy; more homes are failing to close once under contract or, as we more commonly say, falling out of escrow.

This morning I took a quick peek into the statistics, courtesy of the Sandicor Multiple Listing Service. I looked at both homes which successfully recorded in July and homes currently in escrow to see how many of these had experienced previous failed attempts.

On the one hand, I expected the data to be worse (more “fallout”). On the other hand, if you have found yourself in that smaller slice of the pie, it’s pretty bad. And, from purely the agent’s perspective, you can imagine how much we love doing everything twice. Again based on my experience, this is partially due to buyer cold feet in an uncertain market but mostly due to the difficulty in obtaining financing in a market where the rules of underwriting are changing as often as a new mother of twins. In recent times, up until about a year ago, failed sales were quite the unexpectedly anomaly. Today, it is important to remember that your home is not truly sold until the Fat Lady gets her County tax stamp.

I need people.
I spent much of yesterday with my head buried in statistics and faced with an ongoing technical dilemma. Admittedly, this kind of work is not very sexy, but then I don’t have “people.” (And, I mean no offense to Cyber-Steve, Master of the Crashed Hard Drive. He just has different skill sets.) Since the breached birth of our new MLS system in May, I have been struggling with a way to easily import market statistics given that they (the perpetrators of Tempo 5) robbed me of my right-click capabilities. So, I started Thursday morning on a mission to right the wrongs, the “wrongs” being my data living under lock and key and a website which has consequently been displaying very outdated real estate numbers for a couple of months.

Skip this part if embedding stuff in web sites doesn’t turn you on.
If you don’t care about the nuts and bolts of my solution, scroll down a paragraph or two; the braver may soldier on. My first thought was to import the data in PDF format. In response to my question of how to embed a PDF on my web site, my bloggy buddies on Twitter quickly responded with the Docstoc and Scribd solutions. These turned out to be the right answers to the wrong question. I quickly remembered that the MLS reports include too many fields which are of no value to my readers, plus they offer the added bonus of getting truncated about halfway across the page when printed to file.

The ease with which I can post and update statistics is of paramount importance. (See “I don’t have people” above.) For this reason, I have always loved the Altos charts for listing activity because, once embedded, they are perpetually updated, kind of like magic. If at some point, I get hit by a truck, or a burning brick for that matter, consumers will have the comfort of at least knowing what the median listing price is for homes in their community. So, my solution for providing homes sales data comes about as close to being magically self-sustaining and worry free as I can get it, with the help of EditGrid.

Here comes the cool part.
Using EditGrid, I created a spreadsheet of homes sold, thirty-days back, for each of six San Diego I-15 Corridor communities. I embedded the spreadsheets in our web site and now, future updates require simply that I update the data on the EditGrid site. This is an example of my handywork:

All of these statistics currently live under the Market Stats button on our web site. I intend to update the data every two weeks or so, which should be quite manageable. Time permitting, I also hope to branch out and add some coastal communities to our list. Maybe this isn’t quite as exciting as, say, doing a load of laundry, but it’s all I’ve got for the moment — until I get me some of those “people.”

The Case-Shiller Home Price Indices are out for May, and San Diego saw a 23.2% decline in prices year over year. That’s the bad news. The good news is that if you are looking to buy a home in Scripps Ranch, you now know who your management company will be.

It’s been quite a little project, but our interactive companion map to the table of Scripps Ranch Homeowners Associations (brought to you by EditGrid) is mostly complete. I say mostly, because I know of one subdivision for which we are missing information and another four which I somehow failed to include in the map, but at this point, finding the missing data is like a little game of “Where’s Waldo?”

This little labor of love was created using Google mapping. Ultimately, my goal is to include a photo for each subdivision. Of course, we have created a monster which we will have to continually update, but it beats the heck out of spending my time obsessing over those wacky Case-Shiller dudes.

View Larger Map

We have long been acquiring and posting floor plans on our web site for the various Scripps Ranch neighborhoods. Our newest creation represents our latest installment in our information overload series. This will permanently reside on our web site under the “Scripps Ranch ‘Hoods” tab, and now that we have more or less answered the question of who does or doesn’t pay Mello Roos, I am off to figure out what other useful neighborhood information I can provide that people don’t know they need or want.

Now that you are awake, I threaten to put you to sleep.

The San Diego Union Tribune had an article this morning about airlines promoting ala carte services as a way to stay afloat. In quoting the president of US Airways, J. Scott Kirby, they wrote:

Historically, all passengers paid for checking bags even when they did not bring luggage, because a charge for transporting them was built into the ticket price. Now, Kirby said, “those who want the infrastructure to check bags, will check bags; those that don’t, won’t pay for them.”

Yeah, right. And this statement, naturally, got me thinking about Mello Roos fees.

The “Mello,” as it is familiarly called, is a California thing. It was devised (in theory) to do to new home construction what Mr. Kirby says the airlines are doing to the cost of air travel. First, in case you were itching for a primer this morning, here is the back story.

In 1982, the Community Facilities District Act was approved by the State Legislature. The bill’s coauthors were Senator Henry Mello and Assemblyman Mike Roos — Get it? The impetus for the bill was our famous Proposition 13 which was enacted in 1979 and severly limited the amount of property tax revenues which our local governments had previously enjoyed. With tax revenues limited, revenues which could be earmarked for public improvement projects and new infrastructure, a new source of funds was needed.

In newly developing areas, it became the norm for cities to exact fees and infrastructure improvements from developers as a condition of project approval. In the case of residential development, higher fees and costs meant that the developers would pass these costs through to the home buyers in the form of higher prices on the homes themselves. The Mello allowed an alternative, wherein municipal bonds would be sold to raise the money for required public improvements and infrastructure, and the bond debt would be subsequently passed on to the new homeowners in the form of a Special Tax Lien on the property.

The theory, or propaganda, much like the theory being tossed about by the airline industry, was that rather than imputing the costs of improvements in the price of the home, home prices would be lower since the folks benefiting from the improvements would be funding these costs after purchase. It should come as no surprise that this didn’t happen.

Now, at least in our San Diego neck of the woods, Mello Roos is generally associated with newer development, so those wanting “new” have all but resigned themselves to the Mello Roos burden. Buyers still grumble, but the good news is that since the special tax is based on square footage and not price, homes built prior to the 2000 boom years saw enough appreciation to make the Mello somewhat palatable relative to the total tax bill. Many homes constructed more recently in San Diego County, however, carry a significant Mello burden. In some cases, the effect is to increase the tax rate (based on today’s prices) by as much as 60% or more.

Not all Mellos are created equal, of course. Some run for 15 years, some for 22 or more. Each Community Facilities District has its own rates and sunsets. “How long?” was a question we rarely got until recently, because the buyer just assumed it would be around as long as they would be around. Now that we have a few years under our belts in some of the earlier Mello neighborhoods, we get asked this more often. In Scripps Ranch Villages, for instance, we are told that our Mello Roos runs through 2020, so we can almost see the light at the end of the tunnel.

Finally, here are some of the things that the Mello pays for: Streets, sewer systems, and capital costs associated with police and fire services, schools, parks and libraries. If you aren’t in a Mello Roos district? Then, your city’s general fund gets the nod. The irony, of course, is we all benefit to some extent from the Mello-funded goodies, whether or not we live in a home subject to the special tax.

You can read up on the boring details here. The bottom line is that while the Mello Roos funds public improvements previously paid for by the developer (and passed through in the form of a higher price on the home), the distinction has been all but lost. Buyers would prefer to not have a Mello, but I rarely see a buyer who factors the tax into their offer price. Further, while appraisers in the early days found the Mello to be a consideration, it is all but ignored by appraisers today.

And no matter what Mr. Kirby says, we are all going to continue to pay for the baggage handling infrastructure. It is just that those of us with actual bags will now be paying a little more.