Relating to Real Estate |

Relating to Real Estate

Some residents have noticed that over recent years an increasing number of property owners have moved here from very affluent communities.

While this observation seems hardly foreboding, in regard to the total ratio of owners here, serious changes can take place in regard to property values.

Before one jumps to the conclusion that we could be in for a welcome change from lackluster prices here, read ahead.

Residents from affluent neighborhoods are more prone to expect greater amenities when they move to Wildwood. Many have played golf previously and miss the grandeur of a lush country club. This began following the “DOTCOM” period.

Some expect Wildwood to be what they have enjoyed in their last community. After all, Wildwood is a gated community with a golf course, lake, a community center and guarded gates.

However new arrivals feel they should be reminded that Wildwood was never intended to be a place for the rich to flaunt their project. It was a planned development designed for vacation and recreational use.

While Wildwood has proved to be far more than what was planned, the basis for success of the project still depends upon the support of the vast majority of non-golf course, non-lakefront property dues. Without these less expensive properties paying dues to fund the huge total expenses, the project cannot survive.

In the Bay area, entire communities are supported through high taxes from large, expensive homes on expensive lots. Residents must have greater incomes in order to afford homes in these communities.

Thus lavish clubhouses, luxury vehicles and boats, etc. are the norm. It is only natural for people from such areas to expect that their new home in a nice project have these features.

The difference, however, is that we do not have this vast expanse of homes in the seven figure range to support what is expected. Also, affluent incomes are seldom made here in Nevada County to support most homes.

Wildwood is dependent upon the dues provided by over 50 percent of the properties in Wildwood in order to fund what we already enjoy here. That fact was present even before we voted to build a new clubhouse, the cost now estimated at over eight million dollars.

Why will this be a problem? Because as yearly dues rise higher and higher, the ratio of taxes and dues to the total utility of a home soon become a problem, and even the sale of the property can be difficult.

The scenario? Owners cannot rent the property out and break even, let alone cover maintenance and insurance costs. Thus many owners keep the rent monies, and don’t pay the mortgage or the homeowner dues. Foreclosures eventually follow and the home looks rundown. Total revenue to support the community becomes insufficient. The result typically is an increase in dues, which nearly always leads to a collapse of the homeowners association.

Failures of homeowner associations (HOAs) are far too common. This is the reason California has the Davis Sterling Act — to protect the property of the residents against self-destruction.

Too often, the Act is ignored. It is up to residents to see that this does not happen!

HOAs are usually governed by elected, unpaid residents who donate their time in selfless, voluntary effort. Too often, however, they have little experience and make blunders in an effort to please those who have helped them get elected. The result is expending huge amounts of money which drags a community into failure. Read between the lines.

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