Folks, let’s not be carried away into another discussion about whether Temecula is hell or heaven. For the near term, I do think Temecula has more downward price pressure than San Diego. My theory is that the jobs held by Temecula residents are mostly marginal jobs. And that’s why they are paid less than the best jobs in a company, forcing them to pick Riverside as their home. So if the company is doing great, they should be able to hold onto their jobs and do relatively well. But if the company is turning south, they would be the first ones to let go.
I think that’s why the unemployment rate is much higher in Riverside county. And then once the unemployment becomes higher, all the local service jobs are beginning to get eliminated as well. I don’t see how Temecula can get out of this cycle for the next few years.
The only thing on the Temecula side is price. When the price is close to investment grade, the investors all around the state flocks in. Let’s face it, there are still too much money chasing too few opportunities right now. That’s why the mortgage rate is well below 5%. There are just way too much money chasing after very few qualified borrowers nowadays. I told the low mortgage rate good news to my coworkers recently, but then I realized not many of them can get that interest rate at all. They are either loaded up in debt already (most of them) or don’t qualify for other credit reasons (recent bankruptcy, etc). That’s for people who are employed as I am. I am sure there’re people who just don’t have qualified income to get the rate.
So I think the Temecula price would hover around the current level at best, and may even drift down lower in the coming years. I still doubt that it will break $100/sqft barrier though.
