I assume that one of you works in SD. If this is the case, Temecula is a big mistake. Gas prices are much more likely to rise than to decline significantly. Can you afford $4.00 gas driving 120 miles per day, if so, you can probably afford to live in SD. Why spend over 2 hours of your day in a car? Is that the way you want to spend your day? That time could be used with family doing things together. I don’t know how you consider that a “reasonable commute”?
So many people are tempted to sacrifice their lifestyle by moving farther away, only to afford a big house. I don’t get this logic. A big house won’t make a better life. Prices are coming down everywhere. Including SD and OC. They have a lot farther to fall as well. You can rent, or buy a smaller home closer to where you work, and save time and money on gas.
I think Temecula is a good place for the right person/family. Move here if you like the area and what it has to offer. Don’t move here because it’s a “cheaper alternative”. Temecula is an exurb, a bedroom community, and a family community. It is not even a decent employment base. There are few “real jobs” here and most people who have corporate jobs commute. (many of them unhappily). This makes Temecula and the surrounding areas extremely vulnerable to gas inflation, or recession. There is plenty of downside to home prices yet to come.
The effects of the busting of the RE bubble are taking their tolls on many locals here, as this areas recent success was based SIGNIFICANTLY on construction, and RE finance and sales, etc. I know many people who would be glad to have a job at IN N OUT right now. This area had MANY people involved in construction, landscape, lending, painting, furniture sales, pool building, grading, plumbing, electrical. Now many of these people are making ends meat, and things have only just begun. Layoffs and job losses in the area will likely only get worse. Temecula can only sustain so many hair, nail, and tanning salons and when people have to choose between vanity and food, they will choose food(I hope anyways). You can see how its a ripple effect, and that this area has the potential for big problems. Most jobs are service sector, retail, food related, etc. Obviously there are teachers, police, fire, and the usual gov. jobs. A few years ago there were plenty of RE related things to do, but I personally don’t think we will see another RE bubble for at least 6 years. While Temecula has grown dramatically the past 15 years, most of the jobs here are small town jobs.
you said: My take: do the dropping prices mean that investors will snap up tract homes, turn them into rentals, thereby making some communities more vulnerable to crime and other misdeeds? .. possibly and likely. There is no shortage of either rentals of resale homes in Temecula. There is an over supply of homes in general up here if you ask me.
