Assume for the moment that I agree with you that you are within +/-5% of the bottom that will be seen in this downturn. As in your $250/k house will not go below 238k, in more than just one freaky, run down, cracked slab, PoS, foreclosure sale. I can see that happening at 4-5% interest rates. It doesnt take too much money to afford a hosue that is 250k at 5%.
What I wanna know is how long you think TV will STAY at the bottom. Is TV gonna be V shaped, or L shaped? I ask, because bottom calling A) riles people up, B) Implies, if for no other reason that the implict association with relator groups who have been bottom calling for years now, that it is a buy now or loose situtation, C) both you and Bob could be right if foreclosures keep feeding demand for the next year or so and no price appreciation is seen.
And let me state for the record that I dont really care either way. I am not even looking to buy right now, I havnt been to SDL in months, and have never really even been to TV and have no intention/plan of ever living there. I am sure it is nice and all, maybe some day I will live there. I just dont see it happening right now, so my interst is PURE curiousty. So, Could someone buy in December at the bottom too? [/quote]
I know you asked for TG’s opinion but I’ll give mine since I chimed in with his bottom call earlier. I think without a doubt we are looking at a big fat, long and juicy L. We are at or near the bottom (+/-5%) but there are definitely no indicators that there will be *any* sort of appreciation in the next few years. When interest rates start to rise and inflation sets in, we hopefully will see some wage inflation and home values rise in accordance.
Either that or coastal prices stay stable due to more government influence and those waiting for 50% off in the “good” areas get fed up and move to TV after renting for 15 years…That sure might impact prices out here a bit.
We also need to look at population growth – despite the economic conditions there are still growth factors in play out here. With both Murrieta and Temecula pretty much built out, once the existing home inventory is filled (which will admitting take take…7-10 years?) you will start to see further growth in our fringe market and a greater demand in the core city (Temecula). This is assuming employment remains stable, schools stay strong and crime doesn’t increase (compared to neighboring value-priced options, i.e. Menifee, Wildomar, French Valley, Lake Elsinore).
Another factor is business development and growth. Both Temecula and Murrieta built out *a lot* of high quality, Class-A office space during the boom that is now dead cheap. As businesses in LA, OC and SD look to cut costs in the *new economy* you have to start looking at value priced office locations. When you have an area with affordable homes and cheap, high quality office space you create a very attractive relocation option. Now I’m purely speculating and being a cheerleader now but I think it is conceivable that we’ll see an increase in local business growth over the next 5-10 years with at least a few major firms setting up operations out here. We’ve had cheap housing before but didn’t have the infrastructure to facilitate high-wage white collar job growth. We have both now, so time will tell.
So my feelings – nice bumpy and long bottom. 5+ years. Wage inflation + population growth over the next decade (7-15 years) and we might start to see additional growth. Throw in a few business relocations or expansions and we might see larger gains.
