A few more thoughts:

-Unlike San Diego, those areas of Riverside County (Temecula, French Valley etc.) have tens of thousands of planned homes/homes in progress. Builders should be willing to deal for some time to come. In San Diego, however, I would worry that the lack of new SFR being build will eventually lead to builders less willing to deal because they just wont have the excess inventory. Make sense? For this reason, I wouldn’t feel pressured to buy right away.

-Try to negotiate items other than purchase price. You should still try to get the best price you can, but try to be creative. Builders will be reluctant to lower prices, but more willing to throw in options, offer to pay your mortgage for a year etc.

If I buy it now… say at 500-550… vs waiting 6 more months for it to come down to 450-500… but I’m spending $1500-2000/month in rent… am I worse off for buying now vs. waiting?

We’ve all been brain-washed into thinking that renting is “throwing money away.” You need to seriously rethink this logic then the buy/rent decision will come by itself.

We are just in the first year of a downturn in real estate. 5 years into the downturn would be a more appropriate time to think of buying.

5 years from now may be a good time to buy, but a more immediate goal might be to at least wait it out until at least this Fall to see what happens. It’s not as if things are suddenly going to take off between now and then, and they are very, very likely to get much worse according to almost all measures, or at least those not affiliated with the NAR. If you think that most folks here and most of he experts are wrong, then I say you should buy now, and there is a chance that you will be right. Otherwise, where’s the compelling argument to hurry up and buy?

Pick the House with the inentives. Then deduct 20%.
YOU are non contingent. Don’t be a WIMP. I would get an agressive agent. Go for it. Peace of mind.
Then again Temecula has a lot of short sales. You may get a better deal with a house 2 years old. Get an agressive agent who will tender the price you want and find the distress properties.

One strategy you might want to consider is buying the $500K unit across the street and getting the builder to throw in the “extras” from the house you like. Of course that will depend on what those extras are. If they are things like nicer appliances, light fixtures, or other easily replaced items, then it should be no problem getting them. Even something like better flooring or countertops isn’t out of the question. But if it is a three-car garage vs. two or something like that, then obviously there isn’t much they could do. And of course the view isn’t a negotiable item, so if that is really important to you it might be a deal breaker.

Other items you could stick them for:

• If there is anything left to do in terms of finishes (carpet, paint, trim, appliances), then go for the highest-end items the builder offers. From your descriptions it sounds like these might be “fully finished,” so maybe there’s nothing to do here. But see below for some items you could ask for even if the builder considers the unit done.
• Interest rate buydown – since interest payments don’t contribute anything toward your equity, getting your rate lowered is a big plus if you plan to stay in the house. Since you plan to stay put, I would go for points to lower the long-term rate, not just a 3/2/1 shorter-term buydown.
• If any appliances are not included, such as refrigerator or washer/dryer, get them thrown in. Of course make sure to get quality brands.
• If you plan on re-painting any rooms, decide on the colors and have the builder do it.
• Have the garage (if present) finished out. Garages are often “unfinished” in terms of painting, sealants for the concrete, etc. We had this done on a place we bought and it made our garage look lots better than the neighbors.
• Nothing says a “finished” house can’t have trim added for baseboards, crown molding, etc. – assuming these aren’t already present and are something that suits your taste and the style of the home. This will be easier to get if the builder is still working on similar units in the area (whether in the same development or nearby).
• Pre-pays of HOA fees and Mello-Roos are OK, but these don’t really add to the value of your house they way physical upgrades do, and they create “adjustment shock” later when you have to start paying. The big exception would be if you can get the builder to completely pay off any Mello-Roos, so that in the future you can market the house as “no Mello-Roos.”

These are all ideas to use if the builder won’t give you a significant price break. I’m a big proponent of getting the lower price if possible. That lowers your interest payment and your property taxes (an important point in California, where the purchase price is critical for the tax assessment), and you can pursue any upgrades you want with the unspent money. The only item above that I would consider really worthwhile as a “hidden” concession is the interest buydown, and then only because you indicate a plan to stay in the house a long time, so that savings from the lower rate would add up.

Ok, so how many of the people that are waiting it out have actually invested in real estate? Those that chase the market never catch it, because by the time you think it’s hit bottom the market has started to rebound. One more thing to consider is that while rates are low they will go up one day and even if prices stay level or even drop several percent an increase in rates means you are paying more for your home. As a homeowner you get added deductions on your income taxes, too.

This is a market of opportunity and someone on Mad Money said recently, if you buy now in five years time you will be reaping the rewards. I would caution though against an area like Temecula where there is so much ongoing construction that will create added competition when you go to sell.

I think the best deals are going to come directly from a builder or on bank-owned properties. Just realize that when buying from the builder you need to factor in the cost to landscape, install window treatments, and furnish the home and most bank-owned properties are fixers. Builders are hesitant to record “rock-bottom” prices so try negotiating on closing costs, upgrade allowances, HOA credits, or even Mello-Roos payoff.

At the end of the day it always comes down to location so pay special attention to things like lot size, proximity to power lines and major roads, privacy, immediate and surrounding neighborhood, and even floorplan as not all of the models in a development have the same appeal.

In 2007 I sold my primary residence for a record high for the plan at $1.330m (paid $925k in 2004 plus added about $180k in improvements), sold a flip for $430k minus $10k for buyer credit (paid $305k five months prior as an REO, put about $55k into it, market time was only about 3 weeks and had 3 offers), bought new primary residence for $950k as an REO have about $75k in improvements and it’s worth a solid $1.2m. Oh, and this follows buying a condo for $565k in 2003 and selling it in 2004 for $835k with only about $15k in improvements. It’s about time to buy again!

I’d like to see where all of these naysayers are in 1-3 years time who’ve lost sight of real estate as a long-term investment.

Ok, so how many of the people that are waiting it out have actually invested in real estate? Those that chase the market never catch it, because by the time you think it’s hit bottom the market has started to rebound. One more thing to consider is that while rates are low they will go up one day and even if prices stay level or even drop several percent an increase in rates means you are paying more for your home. As a homeowner you get added deductions on your income taxes, too.

This is a market of opportunity and someone on Mad Money said recently, if you buy now in five years time you will be reaping the rewards. I would caution though against an area like Temecula where there is so much ongoing construction that will create added competition when you go to sell.

I think the best deals are going to come directly from a builder or on bank-owned properties. Just realize that when buying from the builder you need to factor in the cost to landscape, install window treatments, and furnish the home and most bank-owned properties are fixers. Builders are hesitant to record “rock-bottom” prices so try negotiating on closing costs, upgrade allowances, HOA credits, or even Mello-Roos payoff.

At the end of the day it always comes down to location so pay special attention to things like lot size, proximity to power lines and major roads, privacy, immediate and surrounding neighborhood, and even floorplan as not all of the models in a development have the same appeal.

In 2007 I sold my primary residence for a record high for the plan at $1.330m (paid $925k in 2004 plus added about $180k in improvements), sold a flip for $430k minus $10k for buyer credit (paid $305k five months prior as an REO, put about $55k into it, market time was only about 3 weeks and had 3 offers), bought new primary residence for $950k as an REO have about $75k in improvements and it’s worth a solid $1.2m. Oh, and this follows buying a condo for $565k in 2003 and selling it in 2004 for $835k with only about $15k in improvements. It’s about time to buy again!

I’d like to see where all of these naysayers are in 1-3 years time who’ve lost sight of real estate as a long-term investment.