Vacant Bank-Owned Properties Are Being Sold Into the Market Rally

The fix is in to stabilize prices through restricting supply. Will the cartel arrangement hold up and permit an orderly liquidation of REO without crashing prices?

14911 Sumac Ave   Irvine, CA 92606  kitchen

Irvine Home Address … 14911 SUMAC Ave Irvine, CA 92606

Resale Home Price …… $719,000


Where were you when I was burned and broken

While the days slipped by from my window watching

And where were you when I was hurt and I was helpless

Because the things you say and the things you do surround me

While you were hanging yourself on someone else's words

Dying to believe in what you heard

I was staring straight into the shining sun

Lost in thought and lost in time

While the seeds of life and the seeds of change were planted

Outside the rain fell dark and slow

While I pondered on this dangerous but irresistible pastime

I took a heavenly ride through our silence

I knew the moment had arrived

For killing the past and coming back to life

Pink Floyd — Coming Back To Life

Is the housing market coming back to life? Am I being foolishly cautious to believe the massive inventory of delinquent borrowers will be a problem for the market?

The fix is in

Whether through concerted effort, foreclosure moratoria, or a coincidental paralysing reaction to crashing prices, banks stopped processing foreclosures as borrowers went delinquent in mid 2008. By early 2009, banks stabilized prices by constricting supply through dis-approving short sales and allowing widespread squatting. The banking regulators who are supposed to watch over lender's non-performing loans are turning a blind eye and allowing the amend-pretend-extend dance to go on. As far as I can tell lenders are going to continue on this path for the foreseeable future.

Everyone in the homebulding and development industries has responded to the apparent stabilization to provide new product to the market. Houses are being built and sold, loans are being written, and people are going to work. I think that is great, but there is one big problem: distressed inventory.

What are we going to do with all those homes?

Whenever I attend a Building Industry Association meeting, I ask the same question, "What are we going to do with all those homes?" Nobody really knows the answer.

Everyone hopes the lenders can meter out the supply at a rate that allows some amount of new construction and doesn't crash prices. The lenders hope the same. The problem is the arrangement is a cartel, and each bank has incentive to cheat and liquidate its non-performing assets. Banks need that capital, and it is wasted while it is tied up in a squatter's loan or vacant property. The incentive to liquidate is stronger than the incentive to hold out for higher prices, particularly since liquidation of the cheaters leads to lower prices for those who hold on.

Imagine the thousands of properties in distress being held until there is sufficient price and volume for lenders to liquidate. This is overhead supply. Until the market absorbs these homes, prices are not going higher. Perhaps in the short term, the limited supply can move prices up, but eventually, lenders need to foreclose and liquidate otherwise they have purchased a large number of properties and given them to squatters.

Today's featured property

This property was originally purchased on 10/28/2005 for $795,000. The owner used $636,000 first mortgage, a $159,000 second mortgage, and a $0 down payment. He defaulted in late 2006, and the property was purchased by U S BANK NA, ; HOME EQUITY ASSET TRUST 2006-1HOME EQUIT, ; SELECT PORTFOLIO SERVICING on 05/22/2007.

Foreclosure Record

Recording Date: 04/27/2007

Document Type: Notice of Sale

Foreclosure Record

Recording Date: 01/25/2007

Document Type: Notice of Default

I first wrote about today's featured property in Pass the Knife from last July. Back then, the owner was asking $650,000 and couldn't get it. Now they believe the market has appreciated 10% and they can get $719,000.

14911 Sumac Ave   Irvine, CA 92606  kitchen

Irvine Home Address … 14911 SUMAC Ave Irvine, CA 92606

Resale Home Price … $719,000

Home Purchase Price … $600,000

Home Purchase Date …. 5/14/2010

Net Gain (Loss) ………. $75,860

Percent Change ………. 19.8%

Annual Appreciation … 238.0%

Cost of Ownership


$719,000 ………. Asking Price

$143,800 ………. 20% Down Conventional

4.94% …………… Mortgage Interest Rate

$575,200 ………. 30-Year Mortgage

$147,861 ………. Income Requirement

$3,067 ………. Monthly Mortgage Payment

$623 ………. Property Tax

$0 ………. Special Taxes and Levies (Mello Roos)

$60 ………. Homeowners Insurance

$42 ………. Homeowners Association Fees


$3,792 ………. Monthly Cash Outlays

-$748 ………. Tax Savings (% of Interest and Property Tax)

-$699 ………. Equity Hidden in Payment

$275 ………. Lost Income to Down Payment (net of taxes)

$90 ………. Maintenance and Replacement Reserves


$2,710 ………. Monthly Cost of Ownership

Cash Acquisition Demands


$7,190 ………. Furnishing and Move In @1%

$7,190 ………. Closing Costs @1%

$5,752 ………… Interest Points @1% of Loan

$143,800 ………. Down Payment


$163,932 ………. Total Cash Costs

$41,500 ………… Emergency Cash Reserves


$205,432 ………. Total Savings Needed

Property Details for 14911 SUMAC Ave Irvine, CA 92606


Beds: 5

Baths: 2 full 1 part baths

Home size: 2,350 sq ft

($306 / sq ft)

Lot Size: 5,000 sq ft

Year Built: 1972

Days on Market: 8

Listing Updated: 40312

MLS Number: S617168

Property Type: Single Family, Residential

Tract: Cp



FLORRING? CELLING? This listing agent has random double-letter disorder.

I love the abbrviation for "association." I typically add an OC to the end to form "assoc." Although, an OC ASS POOL might be nice too….


Despite the threat of overhanging supply and uncertainty about what will happen with distressed inventory, builders are building and selling homes.

Building Is Booming in a City of Empty Houses

By DAVID STREITFELD Published: May 15, 2010

LAS VEGAS — In a plastic tent under a glorious desert sky, Richard Lee preached the gospel of the second chance.

The chance to make money on the next housing boom “is like it’s never been,” Mr. Lee, a real estate promoter, assured a crowd of agents, investors and bankers. “We’re going to come back like you’ve never seen us before.”

Home prices in Las Vegas are down by 60 percent from 2006 in one of the steepest descents in modern times. There are 9,517 spanking new houses sitting empty. An additional 5,600 homes were repossessed by lenders in the first three months of this year and could soon be for sale.

Yet builders here are putting up 1,100 homes, and they are frantically buying lots for even more.

We have bulldozed thousands of homes on paper by tieing them up with squatters or allowing them to stay empty. Jim Cramer was right about bulldozing significant areas of Riverside County. We have. We bulldozed houses on paper by pretending and acting as if the houses are not there. It is even worse in Las Vegas.

Las Vegas is trying to recover by building what it does not need. It is an unlikely pattern being repeated in many of the areas where the housing crash was most severe.

“There’s a surprising rebound in the hardest-hit markets,” said Brad Hunter, chief economist with the consultant Metrostudy. “People are buying again.” From the recession’s lows, construction has nearly doubled in Las Vegas, Phoenix and Tucson. It is up 74 percent in inland Southern California and soaring in Florida.

Some of the demand is coming from families that are getting shut out of the bidding for foreclosures by syndicates that pay in cash, and some is from investors who are back on the prowl.

This statement is accurate, but it fails to capture what is really happening. The demand is still very low. Total construction and sales are far below the lowest low experienced since WWII. The blue line in the chart below is single-family residential development and construction. The bottom of the trough of the early 90s would feel like a housing boom relative to current activity levels.

The recovery we are seeing in the new home construction market is completely a result of the tight constriction of resale real estate by the banks. The inventory sits over the market waiting for banks to do something. Right now, the banks are feeling rewarded by doing nothing; prices are going up, and on paper, they are doing much better. Of course, they eventually have to sell those homes, and the demand is not infinite. As they sell, either prices will go down or appreciation will be held in check for decades.

Land and labor costs have fallen significantly, so the newest homes are competitively priced. …

“We’re building them because we’re selling them,” Mr. Anderson said. “Our customers wouldn’t care if there were 50 homes in an established neighborhood of 1980 or 1990 vintage, all foreclosed, empty and for sale at $10,000 less. They want new. And what are we going to do, let someone else build it?”

Builders are suppliers who react to market conditions. Builders do not make a market, nor do they exercise much influence over it. If conditions are such that a profit can be made building homes, that is what builders are going to do.

All of this goes contrary to the conventional wisdom, which suggests an improved market for builders is years away. Nationwide, new home sales at the beginning of this year plunged to a level below any recorded since 1963, when the figures were first officially tabulated.

The entire building industry is on life support. The minimal amount of homes we are building right now isn't enough to sustain very many people. We had over-employment in the building industry during the bubble, but now employment is so low that many qualified and experienced workers are having to retrain themselves for other work. The small core of knowledgeable professionals that we will need when real demand returns to the housing market is barely getting by.

Simply put, the country already has too many houses, the legacy of wide-scale overbuilding during the boom. The Census Bureau says there are two million vacant homes for sale, about double the historical level. Fewer new households, moreover, are being formed as families double up for economic reasons, putting a further brake on demand.

… “Housing is construction. It’s tables. It’s paint. It’s couches. It’s toilets,” said Sally Taylor, a specialist in liquor and gambling establishments who attended the American West festivities. “If we build more houses, we’re creating more jobs.”

… Analysts have calculated that it could take as long as a decade for inventories to return to their precrash levels and for demand to once again exceed supply. That is a grim prospect for any owner who hopes to accrue equity through rising prices.

That is why buyers should never purchase because of dreams of appreciation riches. That is kool aid intoxication, and it will be revealed as the illusion it is at the worst possible time.

43 thoughts on “Vacant Bank-Owned Properties Are Being Sold Into the Market Rally

  1. No_Such_Reality

    There is no distressed inventory. There is destroyed inventory, there is mangled inventory, but there are no distressed sellers.

    The bank short sale process is now becoming an automated no people interaction process where the bank look at the comps from the last 6 months and sets the price.

    Take it or leave it.

    Prices are not going to move lower until the banks are forced to acknowledge their non-performing assets.

    If a seller is distressed, frankly, IMHO, they’re a fool. What’s to be distressed about?

    Hell, I’m a fool in hind sight for not grabbing a $2 million dollar home with a liar loan and squatting for two years and ripping out an extra million in tax free refi money and moving my wife and I to a cozy little retirement in Costa Rica. No payment were necessary. No payments are now necessary. It’ll be a year before the bank really gets nasty and if you spend a little to fight it or limp it along once and a while, two maybe three years seems possible.

    If you own a home, why are you paying your mortgage?

    No, honestly, that’s a serious question. If you own and don’t have significant equity, why are you making payments?

    1. Perspective

      We’re making payments despite being underwater (mortgage is probably 10-15% greater than value).

      We’re still making payments because:

      1) Equivalent rent, considering taxes, is probably $250-500 less;
      2) Our current front-end DTI (PITI & utilities!) is less than 23% of our monthly gross household income; and
      3) The amount we’re underwater (currently) represents just 35% of one year’s gross household income;

      Considering the “walk option” will always be available (with no recourse as the mortgage is “purchase”), we’re choosing to hold the option. The mortgage is fixed and fully-amortized, so the balance is declining (at a snail’s pace of course). We have six months’ income in cash which we’re building on aggressively, but if we suffered a prolonged income disruption, it’s comforting to know that there’s a possibility we could live rent-free for a year while determining our next move.

      A friend/coworker is in a similar position as us, and we discuss this topic regularly. We’ve come up with a standard for seriously considering voluntarily walking (assuming rental parity is not completely out-of-whack). You should probably consider voluntarily walking when the amount you’re underwater exceeds one year’s household income. How does that sound?

      1. Stock Investor

        “You should probably consider voluntarily walking when the amount you’re underwater exceeds one year’s household income. How does that sound?”

        It sounds wrong. In other words, there are more factors to consider.

  2. Geotpf

    Um, this house was sold in Feb 2008, according to Redfin. That is, the bank foreclosed on it in 2007, sold it in Feb 2008, and it’s now for sale again, apparently as a standard sale since they are asking more than they paid for it (the sold price was either $590k or $600k-the MLS and government records differ). This is no longer a bank owned property and hasn’t been since Feb 2008.

    1. IrvineRenter

      You are correct. My primary data source is incorrect, and I had to consult another to pick up the 2008 sale as going to a 3rd party.

      It will be a nice flip if they can sell it for asking.

  3. Planet Reality

    “What are we going to do with all those homes?”

    In premium areas with substantial job centers there is no problem. It is a piece of cake to clear inventory in areas like Irvine. Either a house is purchased with 100% cash at auction or a buyer quickly steps up with hundreds of thousands for a down payment.

    Take this house for instance. It is priced at or below rental parity and it is only 10% off peak pricing.

    The bottom 50% of housing markets with high umemplyment and too many homes have a serious problem. The future is bleak for these areas. Anything the government does to try to bailout these areas won’t help. On the other hand any bailout for these areas further props up the premium areas. Buyer incentives and low rates help premium areas while the bottom have continues to decline.

    If mortgage rates fall to 4.0% this house will be at rental parity at peak pricing.

    1. Happy Not In Cali

      Who are these cash buyers or those with hundreds of thousands for a down payment? Where do they come from? I don’t really understand what you are saying.

      Government bailouts aren’t going to help anyone in the long run I agree but I don’t see why Irvine isn’t equally fucked as every other housing market that has had a substantial run-up in prices to lax lending standards that encouraged rent-seeking behavior in home purchases. I mean, why would Irvine is okay, but it is not fundamentally different from Bend Oregon, Riverside California, Las Vegas Nevada or even Bozeman Montana in terms of how its housing market operates.

      What am I missing?

      1. Planet Reality

        IMHO what you are missing is that a ton of wealth was created during the various bubbles of the past 15 years. This wealth flocks to premium areas. It is the evolution of a capitalist society. The top 20% of markets for any good do not have to react the same as the bottom 80%. Wealth continues to flow to the top, the rich get richer and the middle class pays for it.

        There is definitely no over supply of homes in Irvine.

        1. Happy Not In Cali

          I fundamentally disagree that any wealth was created by these bubbles as that’s like saying that a lottery “creates” wealth. What you’re talking about is that a lot of wealth was redistributed. A few winners, a lot of losers, and those few winners do not make up enough cash buyers to keep Irvine’s prices propped up at bubble levels. It’s a national economy and what happens in Riverside is going to affect Irvine in a major way, period. I don’t see how it could be any other way.

          1. awgee

            Much of the wealth transferred into the Irvine housing market in the last 9 months was created in the stock market. If the equities markets continues to fall, and I have no idea if it will, the down payments on Irvine homes will decrease dramatically.

          2. Planet Reality

            What you are saying is only half true. Some wealth was repaired over the last 9 months but even that wealth was created long before that in an earlier bubble. It is just as easy for wealth to be created in a down market as an up market. Even if markets correct significantly wealth is being tranfered to people with the correct foresight.

            My guess is the lambs sitting long are not looking to buy in Irvine over the next year. Those folks would be in cash equivalents.

          3. awgee

            What I am saying is way more thah half true, although it was a generality.

            It is not as easy for wealth to be created in a down market as an up market. It is amazingly more difficult and very few people have the ability to make money in a bear equities market or on the short side.

            And your guess is also wrong.

          4. Planet Reality

            It’s also a generality but difinitely not wrong. Current trends show that the generality is true.

          5. wheresthebeef

            Awgee, did these people short the market when it plunged or go long at Dow 6500? I would imagine that most people lost money in that time period. Trying to time the peaks and valleys is almost impossible. And who in their right mind would gamble a housing down payment in a completely irrational, insane stock market?

            This just doesn’t add up to me. I’m sure there are some people who made a fortune in the market the last 2 years…but that is a very small minority.

          6. awgee

            From those I have spoken with who purchased where I reside, many have cashed out stock holdings and they felt confident to purchase based on the increase in their portfolio. I can not remember anybody telling me they bought at 6500 or that they had timed the market, but I imagine, like you said that you imagine, that their portfolios had gotten kicked during the downturn and they were now feeling more flush. It does add up and it is what I have been told by those who have purchased. I guess the folks who have told me this could be liars, but I have not reason to think so. No one said anything about anybody making a fortune or gambling in an insane irrational stock market, nor is that a prerequisite to buying based an increase in net worth. I think you are adding factors which are not existent in the equation.

        2. BD

          …just an FYI on ‘rental parity’… OC rents and IRVINE rents have been declining now for 7 consecutive months. Check the OC Register.


          1. Happy Renter

            Yep, and that’s the fallacy with Planet Realty’s assumption that rental parity has created a bottom in the prices.

        3. Happy Not In Cali

          Another thing I’ve gotta say, even if Irvine is a premium housing market (which to me is like saying the Lexus ES 330 is a premium sedan – kinda, but not really) that doesn’t mean that the wealthy buyers are necessarily going to buy into Irvine or anywhere for that matter; they might just park the money in other investments.

          In my opinion wealth and consumption do not necessarily go hand in hand because the way rich people become rich is that they spend less than they make. It has nothing to do with whether they spend more than the rest of the population.

  4. HydroCabron

    I checked my credit score the other day, then wondered “Why do I bother? Does it make sense to get a loan in the future?”

    I made the mistake of selling while I had equity, and moving to the rental world. Should have HELOCed the place, bought Krugerrands, enjoyed 1-2 years of rent-free living, then become a Krugerrand-laden renter. My bad.

    But it occurs to me that thrift and no debt, punished though they have been during the ’00s, might now actually pay off. Recent mortgagors now look to be debt slaves, living with a sliver of positive equity – representing a little less than the principal they have paid down minus a small amount each year in a gradually deflating market.

    And the more who think as I do, the worse the deflation will be.

    Seriously, it looks as if those who eschew debt may enjoy a generation of vindication, as a shrinking debt load deflates all asset classes normally purchased with debt.

    I wonder if this will become a positive-feedback loop: more people shaving off their debt, causing prices to drop, causing more to conclude that debt makes no sense, and so on.

    Someday this war’s gonna start!

    1. Perspective

      Dave Ramsey’s a big proponent of not caring about your credit score (in the sense that you shouldn’t be worried about obtaining future credit because you shouldn’t borrow money).

      1. IrvineRenter

        I am a big fan of Dave Ramsey. I recently purchased two of his books and two of his videos. So far, I have found very few areas of disagreement.

        1. awgee

          Know who he is and kinda what he says. Don’t have any of his books. If I wanted to read his books, I would check them out from the library. 🙂

          I have no idea what my credit score is.

    2. avobserver

      “Someday this war’s gonna start! ”

      The war already started – in a WWI meat grinder trench warfare fashion. Long drawn out and boring, with mounting casualties to the net worth of American middle class families as the only indicator that time and things are still moving forward.

      Last time SoCal RE market went thru a 6-year correction largely due to a mild recession and a downsizing defense industry. This time we had a great housing bubble, a severe global recession and debt crisis that was slated to have a long lasting negative impact on private industries as well as state/local gov’t. Any one bother to guess how long this correction will last?

      My guess is – to borrow a clichéd baseball analogy, right now we are probably at the end of the first inning, or maybe the beginning of the second, of the game. Scores (market is up or down 5, 10%) probably do not mean that much at this point. There have been some ups and downs, some are predictable, some are not. The only fun part is to watch people get all keyed up by various fake rallies along the way.

      1. Happy Not In Cali

        IrvineRenter FTW! That is why there are no men in the ass pool. It’s like dancing on the bar – ladies only, please.

  5. newbie2008

    Bubble are rapid transfers of weath and not creation. Bubble transfer weath from one area to another. LV gambling doesn’t create weath, but moves it to LV from other areas.

    Real weath creation is by inovation of new discovery to make something, make something with less resources. Much of “inovation” is just another term for confusing people — change for change sake or change to keep the weath transfer going.

  6. Laura Louzader

    “Real wealth creation is by innovation of new discovery to make something, make something with less resources”.

    Yes, that is true, but we could add that it takes capital to apply the discovery to manufacturing something and getting it to its market.

    We have many new technologies, technologies that could vastly enhance our efficiency, make use of new fuels (thorium, anyone?),and otherwise enhance our lives and render us truly productive once more, thus vastly increase our wealth. But we blew our capital and went deep into debt to sustain the unsustainable economy based on borrowing and buying ever bigger houses for ever greater multiples of income. We took the easy road of financialization and killed our industrial base. Our authorities are now asset-stripping what wealth remains to the population in order to sustain the old, fake economy based on borrowing and asset inflation, to the detriment of the new, innovative technologies that could be the foundation of a honest, productive economy.

    1. newbie2008

      Very ture. The road to wealth destruction is much easier than the road to wealth creation.

      American has been on the road to its wealth destruction, while the many other countries have been on the road to its wealth creation. Capital (equipment and durable assets) and liquidity (cash and equilvents) have been wasted. Mass education, the mind of the middle class, has also been wasted.

      1. Swiller

        And our minds have been wasted because as a people we refuse to accept certain truths. War on Drugs…abject failure and TERRORISM on our own people, 99% of the time, the poor and uneducated.

        War on Poverty…..hows that one going?

        We are so warlike as a people, in the absence of an enemy, we target ourselves and make our own people enemies.

        CEO pay has risen 654% while in comparison the common worker (mostly you and I) has risen a meager 1%.

        They very worst thing about unrestrained capitalism is that soon very few people will control everything. You see, there HAS TO be wealth transfer, but it has to be done properly, with people working and getting a FAIR SHARE of the pie, but between the defacrats who give benefits for ZERO work, and the banana republicans who want to assure every CEO never has to even touch the earth they are created from, the system is BROKEN.

        If it doesn’t get fixed, there will be people dying, and unfortunately, that usually means the poor and middle class start dying or being incarcerated. As Africa about how much intervention they get in comparison with countries rich in natural resources the new plutocracy so lusts for.

  7. Credit Debt Relief

    I believe the banks are hesitant to foreclose on many of their properties because once they do and put them up for short sales, they can’t claim assets they have and then borrow against them.

    For example, if the bank owns a mortgage on a 450k house, they can borrow against that. If they foreclose on that home and short sell it, they end up with a 250k asset to borrow against. There are a ton of individuals in San Diego for example who are months behind on payment but not about to be foreclosed upon.

  8. Ochomehunter

    We know how current stock market rally and some of the miners such as FCX, BHP, and few others ran all the way up to their bubble levels, while there was no real commodity demand. look at how these companies are sucking tits now.

    Banks cannot and will not sit on it forever. If anything, the current financial reform will restrict speculative borrowing from FED discount window for trading, this is something that banks have been doing lately to show profits. Everyone at walstreet knows the real asset value of their portfolio, its just a matter of time. Most banks are illiquid and insolvent right now. This BS cannot go on for long, reason is simple, Europe is falling apart and US is next, with no appetite for US Treassuries, let alone MBS, if FHA tightens the min. downpayment terms watch how things fall apart.

    I have been patient for 6-years, now I just need to stretch another 8-months to see how it pans out.

    By the way, those who play stock markets, Elliott Wave folks have issued a stark warning for US Equities, Dow Jones to be under 1000 by 2016, 6-year downtrend started this month. The reason is implosion of Euro, Dollar, and failure of big banks and sovergin debts. Watchout. I am shorting this market and making a killing.

    On to house, I plan on getting into one shortly, even if I pay a premium. I am in commercial construction and unemployment is above 40% in this industry. With no hopes for improvement, not sure if I will be employed in next 8-months. I need to have means to stay for free and eat from unemployment checks. The only way to do it is to have a home where I can squat when the time comes.

    I know if I lose my job I will get kicked out of my rental place, at least home ownership will keep me in it until the excess ahead of me gets cleared first.

    1. Doomsday scenario ? Nop

      Dow will never ever hit 1000. Why? Because all it takes is printing money and the DOW will float. The world’s economies are suffering from imbalances between consumers and producers – that’s for sure. But fundamentally, the world’s capacity to produce goods and services remains undiminished. There will definitely be winners and losers as a result of the bitter pills and fixes.

  9. WaitingToBuyByAndBy

    Disclaimer: I’ve been out of the loop for at least 6 months, so feel free to take this with a grain of salt.

    Are there not boatloads of properties currently for sale on Redfin? Are there that many foreign cash buyers and investors that can swallow all these?

    If nobody else has called it yet, I’m calling the rest of 2010 the “price slide”, all downhill ’til 2011 (based on increasing supply and decreased demand (fewer buyers).

      1. Planet Reality

        Nobody wants to answer this question. If they do they will talk about Japan with very little true knowledge of the Japanese bubble. Rental parity does not exist in Tokyo.

  10. justaguy

    ok. maybe I’m missing something on your numbers.

    Purchase price of 719K = 623 in property tax and 60 for homeowner’s insurance?

    Just closed escrow on a house for 170k and am paying 270 in prop tax and 60 in homeowners insurance.

    Either I’m getting hosed somehow or IrvineRenter’s numbers aren’t right.

    1. property tax numbers

      I think it’s $623 per month on a home purchased for $719,000 is a little more than 1% annually which makes sense (in California) if there are no “special assessments” AKA Mello Roos…etc. Houses older than 20 years old are likely NOT to have “special assessments”. IR usually allocates about 0.20%, or so, annually for homeowners’ insurance which should be about $120 per month on $719,000 home. Of course, insurance covers the structure not the land so it’s not a direct relationship to home’s total value (total value includes both land and structure), and thus property INSURANCE can vary. If your property is in California, then you’re likely to have “Mello Roos” assesments… It’s probably a good idea to check. Also, maybe the assessor will re-assees your property later on at the new value which is probably lower than previously.

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