I would suggest that we look at what has happened in other areas that have fallen further. Temecula has projects that are being finished at would appear to be below cost for the builder. Either they have to sell at a loss or they have already paid for the land/improvements and it is better for them to sell the land with built product then sell the land at a steep discount. If you can sell a 3000sqft home for $100sqft in Temecula and $150sqft in Chula Vista, then you can do the same in 4Sranch. 4S has been able to dodge the bullet longer then those other areas for now. There may be enough demand to the dodge the bullet even longer at the current prices as long as people keep the builders open for business. I see the builders continuing to reduce price in small increments at a slow pace until there is no demand at the pace. They will continue to match price with must sell inventory and other builders until the other one makes a move. These moves have been painfully slow up to this point and have been brutally frustrating for would be buyers.
