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Today, we want to take the time to give you an in-depth look at what is going on in new home construction in Sacramento. We went through a long hibernation period starting in 2006 and ending just a few years ago where there was little to no new home construction going on. Values dipped so low that it was hard for builders to even break even on a lot of their homes. About 2 years ago, when values rebounded and inventory shrunk, new homes started to recover. Even though they aren't what they used to be, they are an increasing factor in our market.
With inventory still being tight right now for home buyers, a lot of people are tempted to go with new construction. There are many benefits to doing this, with brand new everything, a builder's warranty, and that new home smell. However, there is one potential ticking time bomb that a lot of home buyers really aren't familiar with: Mello Roos taxes.
Mell Roos taxes are bonds that are added on to your regular property tax in a new or developing neighborhood. These taxes can be anywhere from $100-$300 a month and go to pay for things like roads, street signs, parks, irrigation, and drainage. For the most part, these bond payments don't go away. Someone might think they are able to afford a certain kind of home, but find out they simply can't if they have to pay a hefty Mello Roos tax as well.
New home builders and sellers don't like to advertise that you have to pay an extra tax like this. Fortunately, we are very familiar with these and know all the Mello Roos taxes in all the different subdivisions in Sacramento so you can factor that in and take a look at what are the costs and benefits of buying a new home vs. a resale home. If you have any questions or would like some more information, please give us a call. We would love to help you out!
