Its my understanding that building doesn’t really slow down for a year or so until after the shit hits the fan. People finishing re-models or finishing up units they are already committed to. You might start the permitting process in 07, but if you can wait on construction it would probably behoove you to do so until you see quality contractors working at HD again(ie 1995). Then its time to build.

Josh

Is the land already entitled? What kind of permits will you need? Depending on the complexity of the planning issues I’d recommend starting the planning process right now. Maybe the site’s ready to go, but if not there’s many issues that could potentially take years to work through with the City (Biology, soils, etc.) Besides, once you’ve got your entitlements, you typically have 2 years to start building, and even then you could get extensions. That way you could just sit back and wait to time the market to build.

The contractor is usually the last to show up. They might pull building permits for you. You might be best to hire an architect/planner or a planning consultant to help with the site permits from the County. Are you actually in the County and not in Julian? I work for a planning consultant in coastal north county. We wouldn’t take on a project that small but I’m more than happy to offer up advice.

I would recommend taking a trip to the County Planning Dept. (5201 Ruffin Rd). Just take the APN and the counter staff will be able to tell you everything you need to know about the property. That’s the best place to start.

Actually I think you’re pretty close, what with the utilities and septic already worked out. Julian is an unincorporated community but I think they have their own local design review. If you’re using stock plans and its something that would fit in reasonably well with the neighborhood they probably won’t hassle you.

As for timing the costs, 2007 may not be a bad time to start but I’ll bet 2008 would be better. There’ll probably be a lot of local labor actively competing for your contract by then, which will be good for you and for them.

The only possible downside to waiting is that interest rates and underwriting for the construction loan and the subsequent long term financing will probably get tougher as time goes by. If local pricing is in decline it could also affect the amount you could borrow for construction. Be aware that Julian’s location far from employment puts it at higher risk for pricing declines, especially in light of the costs of gasoline.

Lots of the homes and cabins out there are 2nd homes and vacation homes, although the trend seems to be for purchases of primary residences.

I’d agree with the boomer/2nd houses thing, except I think most boomers have their hands full with their kids, their parents and their incredible shrinking 401k right now. I think the wealth transfer from the greatest generation to the boomers may enable some luxury purchases like vacation homes, but only if the boomers haven’t already spent their inheritance on their H2.

Now retirement homes may be another matter. The boomers are retiring now and they won’t need the same proximity to employment. Frankly, I’m seeing more boomers leaving the region altogether rather than go halfway to Julian. My parents left the O.C. and retired to the Black Hills of S. Dakota – they never looked back.

I think Julian, and to a lesser degree, Palomar Mountain and Idyllwild will continue to draw some traffic from the metor region for vacation and retirement plans. I also think luxury spending winds down during an RE recession. Especially if a lot of people get hurt by it.