I have rented for three years knowing that my gross housing expense a (rent) was over 10K cheaper than if I had purchased a like property and had the full tax deduction paying IO, taxes and HOA/MelloRoos.

I lived in Temecula for one year, renting, to see if we enjoyed it. In the complex where we lived, asking prices have dropped 25-30% YOY.

Here are my observations and candid ramblings:

Temecula is a wonderful place to live as far as scenery, however, you have to live and work there for it to be worth it. No use spending 25% of your waking hours driving down the 15 to get to work because there is no industry for 40 miles.

So many people we met are upside down, maxed our financially and are on a one way ticket to bankruptcy. I knew someone who was using his HELOC to pay his mortgage and his interest on his HELOC Loan. . . . . talk about burning equity.

Everybody and his mother seems to have a leased automobile or new car purchased. And every morning Starbucks is full of people in fancy cars, drinking coffee and talking about real estate. My theory is that 80% of the population I can is upside down in their vehicles except those who took out 40K home equity in order to buy that Hummer H2 to show off to the neighbors.

Temecula is the honarary “Bible Belt” and independent free thinking, culture, is limited or non-existent. In a nutshell, Temecula is a land of uneducated bible-thumping white-trash sprinkled among Pechanga Indians (living off the doll) who saw their property values and casino welfare double due to the influx of San Diegans searching for affordable housing.

Given Temecula’s role as ground zero for the San Diego Housing Boom and its mathematically challenged population it was and still is a great area for predatory lending and multi-level marketing scams (Sorry,selling Arbonne is not a career!)

I see values declining for year to come.

Home prices above $500K consist of primarily McMansion speculators or fradulent loan purchasers. E.g., As I drove by one home priced at 750K I noticed the 12 people living, eating and parked in the front yard. I am sure that given the style of clothing (white t-shirts and long black shorts covering arm tattoos) that these individuals were not lawyers, doctors or people with professional degrees who make over 100K in order to purchase expensive homes)

Also, Some neighborhoods change form street to street. The Toyota Highlander or Camry can turn into a 1999 Ford Focus and a Ford F150 packed with a Lawnmower.

I predict complete financial meltdown and 12,000,000 new credit applications to purchase the what remains.