Thursday, March 08, 2007

"Can't Bank on the Housing Market"

From the Sacramento Bee:

Lincoln school officials say they must think small -- limiting campus construction and living with fuller schools -- until their rural district pays off a big debt.

Western Placer Unified School District faces a population boom in its community, but a slowed economy has taught trustees that they can't bank on the housing market.

The district owes more than $189 million, a debt largely related to building schools without having sufficient funding. The district relied on certificate of participation bonds -- described as a risky form of financing -- to keep construction projects afloat, assuming money from developers' fees would remain steady.

But the housing market dropped off, leaving the district searching for ways to pay its bills.

5 comments:

Max said...

There's a good article in the Bee today about Natomas School District overpaying for a bunch of land:

Natomas deal for school site - is price fair?

I noticed the Bee articles get way more comments when you link to them. When do you get an advertising cut? :)

chuck said...

The Ostrich People are all over, I think they must be all related to Bush/Cheney Iraq WMDs Freakoids...

but this Mortgage Stuff is getting REAL serious...bits and pieces of this guy and that guy quitting this and that Board of FlimFlam Mortgage Bankers...they're taking their wives and goats and moving to Montivideo, right next to the George Bush future Estates...

Bits and Pieces in the Economic News...and it all ain't good...

It's worse than all you guys originally thought...

and then you walk thru Walmarts and realize over half of the USA is now a Third World Country...

Why in the Hell are China/Japan/India going to extend the USA Walmart Economy any more money for funny money home loans?

Bleak House Dos!

Sippn said...

Max ... good dirt on Natomas School site - suspect. The site should sell at what its zoned for - agriculture. When the school district buys it, the school district should profit from its ability to develop it as a school, not AKT. AKT is not adding the value to the property. Without the school district, its just ag land. The appraisal should be public now, not after the transaction.

"Dave Jarrette, a prominent local appraiser ..."sounds like fiction."

"The only way they could get an appraised value like that is if it was fully (approved for development), with a tentative map, and ready to build homes," he said.

cba said...

In the height of the market, developers were paying $300,000 to $500,000 and more per acre for fully entitled, ready to go lands. Developers were NOT buying the land at these prices without entitlements. And now, the bloom is off the rose and land values are WAY off their highs. This deal is crazy. I too would agree to give away lots of money if people paid me 5 times what my properties were worth.

Diggin Deeper said...

"In the height of the market, developers were paying $300,000 to $500,000 and more per acre for fully entitled, ready to go lands."

As the prices per acre tumble due to lack of demand, not only do the existing home prices come down, but the taxes either have to go up or people lose their city jobs... or both. Somebody's gotta pay for the city's overpriced land that can't be unloaded for near what they paid. The interest on some on these purchases will quickly eat into the city coffers and the problems multiply. Not pretty for those communities that depended on rapid growth to finance their future. Look for major bond issues coming up at future elections.