I don’t think Temecula will go ghetto anytime soon, because it already a bedroom community for San Diego. But I do think the Temecula/Murrieta housing market will remain flat for at least another 12-18 months before a slow recovery begins. Whereas other parts of Riverside county will continue to drop in prices for another year at least. I really don’t see a recovery for places like Hemet, Perris, and that whole corridor anytime soon. And if gas prices and interest rates go up, things could get really ugly.
What the Temecula cheerleaders don’t understand is this – unemployment is getting worse, not better. And while its true, many investors are jumping in now because of the low rates, they are creating an oversupply of rentals. Rental prices are going down as a result. At some point in the not too distant future, the market won’t be as attractive because positive cash flow situations won’t be as easy to find. When that happens, and it WILL happen, the market will find its bottom once again. Factor in higher interest rates that are coming later in the year, and its not hard to see why the market will remain flat well into 2010, and maybe longer.
Futhermore, as I stated in another post, northern San Diego county has yet to hit bottom. Considering the fact that a sizable percentage of TV commuters work in San Diego, its only logical that they would first shop for an affordable home in San Diego rather than making the long drive to TV. Once the bottom hits and prices start going up in northern San Diego, only then will TV become an attactive area for those shoppers who actually want to live in the house they are purchasing.
