I think the wave just has’t hit that price range yet, visit this post in four months and you will see a different story. Here’s a tale from the front lines of the bust in Temecula. Two weeks ago today I visited the grand opening of a development and they seemed to have priced aggressively. 359k for 2100 sq ft detached alley home ($140 hoa includes all landscaping, pool, no mello roos) granite and choice of cabinet finish and upgraded fixtures free. Last Sunday I went back and after two full weekends of it being open, not one sale. I even asked the salesperson if they were out of sold buttons for their map and she confirmed, not one sale and that phase is being framed and may have passed some room option cutoffs.

Today I visited another large development a mile away that had opened and started selling in January, but to my dismay they are only pouring foundations for the models now and expect the models to be done in August. Same price today that was set in Jan 07 is 359K gets you a 1500 sq. ft. attached triplex, no granite, pay for cabinet finish upgrade, etc. I think they had less sold buttons than they did in January. I told her what the new ones nearby were going for and her jaw dropped. She countered with “well you have to look at what’s included in ours” and opened up the brochure to reveal 6×6 white tile counters and honey oak cabinets. I told her the competition is not only detached and larger by 30% but include everything they charge for. She muttered something about her manager not informing her of this and I added that despite the competition being cheaper, bigger and better, they haven’t sold anything, then wished her luck at these prices and headed to the parking lot where it was easy to find my car as it was the only one besides the salesperson’s. This change took only 120 days.

Maybe only the outlying areas and the lower priced homes will decline during this bubble. Maybe 4-S maintains it’s price level and never goes down with the rest. Good luck with that.