Nice day in Temecula…Haven’t been on Piggington in a bit, and thought I’d check it out after spending a nice day in Temecula. Before I become bearish about the area, I will start by saying that we had a nice breakfast at South Coast Winery with some decent vino, played Cross Creek (this course was supposed to be the centerpiece of a housing development on the De Luz side that got squashed, and now remains a gem of a golf course undiscovered by most) and then hit the high limit at Pechanga. Again, there are not many places you can do this, and it is a great benefit of living there. Which I do miss to a degree.
Didn’t have time to visit McMillin in Morgan Hill, or Gallery. No need to get their hopes up that we might buy some homes as “investors” which we’ve been pitched to do by EVERY builder in the area for the last year.
Changing the name of Hwy 79 to Temecula Parkway was a nice touch, and more places to go on 79 is nice, and good to see the mall expanding.
Still convinced there is gonna be a big hurt coming. I’ll stand by a previous post, $75 sq ft in Morgan Hill, it can get there. 10% drop for 2008 is conservative and misguided. 20% you can count on. As beautiful as Temecula is, it is just to far away, was too reliant on the RE industry as a whole, and the trickle down effect will hit it hard. No need to get into all of this again though, this area has been covered in previous threads, and if you don’t see it you never will until it is to late.
So let’s talk about the higher end areas a bit.
Many of the wealthy in the area who profited on the RE area over the years are obviously quite concerned. We’ve had friends in the area ask us if we would come in and start speculating again. Nope, not yet. All the higher end plans have gone stagnant, and yes the higher end areas will get hit. The higher end areas were reliant on SD, LA, and OC relocates moving into the area, you can’t sell anywhere now, so no more buyers. How does the saying go, the bigger they are, the harder they fall.
For a rundown of such areas from North to South:
Canyon Lake:
Older parts in the gated area have always kept the best properties down, but they still went crazy with the bubble. Even though waterfront is cool, Lake Elsinore as a whole is dragging it down to the depths.
La Cresta (Murietta):
5 acre lots, horse properties, a bit far for many, but a nice area. This area took off with the bubble as OC, SD, and LA folks were able to sell their 2500 sq ft for a mill, and get a 4000sq ft on 5 acres for that same mill. In 2001 we bought a 5 acre lot for 400k and sold for 500k in a matter of months. This area has been struggling with sales for some time, and yes it will drop significantly. That same 5 acre lot and house that sold for a mill in 01, might’ve sold for 2 and a change at peak, and in the late 90’s could’ve been had for 600k tops. Lot’s of room to fall.
Bear Creek:
Love this area. Was a $100,000 away from living there. I know they wished they sold it to me now. Gated with the only private course and country club in the area, this is where many of the elite and power brokers of the area live. Room to fall? oh yeah. On the east side of Bear Creek, a developer went bad years ago, and those half completed homes still sit there, for years now in the same state, right next to the people that did move in. A Resale in that part can be had cheap as it is the least desirable area within Bear Creek. You have townhomes in the area that sold for 400k in 00 and 01, that were resold at a mill during peak, and some misguided sellers still asf 8-900 for. They are about 3000 sq ft and are nice. There are also smaller condos, and then there are the semi customs and customs.
Meadoview:
Not quite as nice as the above, but it does have some nice homes, is in the middle of Temecula, wide variety to choose from. This area was built up in the 80’s and 90’s when Temecula was dirt roads, so you can imagine what the original costs were, and why this area has so much room for depreciation. Beware the need to replace your septic tank in this area, that has been an issue for a number of people there. About a year ago, we went and lowballed about a dozen homes, all said no way, and everyone would sell today at 10-20% less than I offered.
Area between Meadoview and Nicholas (can’t remember the name of it for the life of me):
Was supposed to be semi custom on 1 acre lots. DEAD.
Wine Country:
This is a big area, and is a matter of lifestyle, what you are looking for etc. Rancon was going to build the area of all areas near the entrance of WC, to coincide with 3 new wineries. As far as the wineries go, I believe that is full steam ahead, but have heard nothing of the res project. It is an ambitious plan, and this was my target for permanent residence. If the same plan is in place, I would look forward to still doing it now at a better price. But they may not have enough buyers regardless. The farther out you go, the older the home, the farther the prices will drop. Not to mention all the spec builders stuck with inventory, they may be happy with 50 cents on the dollar.
DeLuz/Rennaisance Estates
They would love to sell to you. Some homes here are super cool as on a clear day you can see the Pacific to one side, and Temecula to the other. Hard to get to.
Rancho Santiago/Santiago Estates:
Right in town, some nice places. Older the home, farther it will drop. Beware bad septic, and stay away from anything near the proposed hospital. Those properties are already on the cheap, and they’ve been trying to sell for a couple of years with no shot. Coincidentally, these residents (NIMBY) are one reason why the hospital hasn’t broken ground.
That’s something that hasn’t been touched as a pro con, is the inadequate hospital facilities in the area. That hospital on 79 is needed in the worst way, but thanks to politics don’t hold your breath for the opening.
On that note, of all these areas one has to think about emergency services. If you have a heart attack in Bear Creek, Meadowview, Rancho Santiago, chances are you’ll be ok. De Luz, Wine Country outskirts, La Cresta, it might take awhile for the ambulance to get there.
In regards to the higher education center which would’ve been a coup for Temecula that was to be built towards Zevo, that’s quashed and is a dead project.
I still think it’s a great area, but if you want to be safe buying, pay no more that 2001 prices. And I still think there is room to fall from there.
The global economy and recession will be worse than you think. The farther away from an economic center, the worse it will be.
