Its been a little while since I posted, however, reading these posts “inspired”me.
I see nothing of value as far as jobs, industry to support the speculative real estate boom that occured out in Riverside/Imperial county other than stripmall retail, liquor stores or public service jobs. This is subprime ground zero and the whole areas will decline in value until rents can cover the mortgage or 2 million illegal immigrants are naturalized, given social security numbers and financed through FHA to buy all the overbuilt crap out there.
In my humble opintion, I see Temecula as the only city of any intrinsic value in Riverside due to its proximity to San Diego County and its job base. Palm Springs would be comparable if not better were it not for the heat.
I am currently renting a beautiful 1900 sq. ft. home for $1,600/month with everything I could ever want. I pay $19,200 a year to rent a home puchased for $440,000 in 2004. Please plug these numbers into a Rent vs Buy calculator and do a comparison.
Prior to this rental we lived in a condo area near Morgan Hill called Auberry Place. In 2005 units for 1,600 sq. ft. were at $389,000. Now they can’t sell any of the units for over $250,000. Do a redfin sales check on the area e.g., Winston Way.
Nationally we are in for another 3 years of pricing declines, however locally here in Riverside noone knows how bad it will get as the rates reset until 2011. The speed and degree of decline is amazing. YOY price declines of 13% do not occur in a vaccuum and do not dissappear overnight. You will have 13% than 8% than 4% than 2% declines as the inventory bleeds out. The question is: Who is going to buy this inventory now that subprime is dead and 60% of the buyers are out of the market?
Now they are requiring downpayments and max house payments of 28% of Gross income. Do you know many people that can fully document 140K salaries?
I can say from personal experience that the automobile industry is getting hammered with no end in sight. My colleagues in the banking industry are in the same boat. Generally automobile and housing data have a historical relationship.
Because I chose to rent I have:
a) No Credit Card debt
b) No Auto payments (2 vehicles 02 and 04)
c) 5K in Student Debt remaining
d) Cash Reserves
Since the housing boom gasoline is up by 50% and my monthly food costs have doubled. (Have you seen the food prices!) My surplus cash reserves have allowed me to take all these hits without losing any sleep and purchase a 6 speaker surround sound system from Magnolia Home theater in my living room and a Culligan Soft Water treatment system. I eat out when I don’t feel like cooking and make sure my family exactly what they need.
Temecula is a wonderful town with a family atmosphere, parks and easy access to shopping on 79 and Winchester. Schools are highly rated (e.g., Abbey Rinke) and you will have your pick of homes to choose from. Be patient and let things run their course. You have nothing to lose and everything to gain.
