If, as another poster suggested, that project was already $50k overpriced before their latest adjustment, they only really adjusted to $50k less than their nearest competition. It looks bad on the surface until you remember they probably bought the land prior to 2003 and based on those prior prices. They wouldn’t admit it, but they still have some room.
As for how low it will go, I think there ultimately has to be some correlation between wages and pricing. Working backwards from $320k and assuming the following: 5% down, 7% interest, ~33% max for mortgage payment and taxes (not counting insurance and HOA), we come out to the following:
$304,000 @ $7% = $2,010 x 12 = $24,129 + $3,600 taxes / .33 = $84,027 annual income. I don’t know that there are but one or two communities in SD County where the median household income is $84k; how many do you think there are in Riverside County? You can play around with the numbers and tax writeoffs and all, but no matter how you slice it even the $321k looks high for an “average” home in that area.
