Considering Buying in Temecula – Can’t afford OC – ???

[dksolomon]

I have been a lurcher (and sometimes poster) on this site for some time now, have seen many changes and interesting views proclaimed and announced. I currently live in south OC, renting currently. Problem is I would like to buy, however I really cannot afford the basic 3 bedroon 2 bath 1500 Sq ft. casa de sol at 600k here. I do not want to go the way of IO loans with no future, only hope that the market goes up – in case I have to sell.

So like many other common middle class foks who just want a decent roof over their head, I am considering the inland empire area – why? You can buy a decent home in 300-400k range without selling your soul. The drive will kill me as I work in N OC, (Just love that 91 crawl) but at least I can sleep at nigth (when I finally get home).

So for all of you guys that have been hammering the lower riverside area with comments of the floor dropping out – speak up. I would like to know what your thoughts are. Where are the best deals – where do I stay away from, and when do you all think it will hit the bottom? Some predict summer, others say 2008. I can rent another year if needed, just do not like where I am, so that means a move and another home my wife cannot decorate to her standards – you girls know what I mean.
Help me out – give me some insight.
I appreicate all your comments.
Grateful in OC.

[IrvineRenter]

The Inland Empire will likely drop rather dramatically over the next 3 years. See link below:

http://www.redlandsdailyfacts.com/business/ci_5169035

So will south OC if you can wait. The price declines in the Inland Empire will be faster and more severe than OC, but both are likely to drop over the next 3 to 5 years.

Don’t buy too early. You will just go underwater.

[FormerOwner]

Temecula (the City proper) is the only part of the Inland Empire that I would even consider living in. The rest of the Inland Empire has nasty smog and many areas have really bad schools and a generally low education level among residents. Traffic is horrible anywhere in the IE, including Temecula, but at least the air is clear and the schools are good. Murrieta is very similar to Temecula but the traffic is worse. French Valley has ridiculous traffic – it’s hard to even get to the mall from there – so no way would I live there.

If you work in Temecula, it’s a nice place to live but I would *NOT* try and do the commute to the OC or even San Diego. You won’t save a dime once you get done paying for gas and buying a new car every few years. Your job performance may also suffer due to the commute. Not worth it.

As far as the market bottom, I think the costs of owning have to fall back in line with rents – that would be about a 50% drop for most tract homes. I think condos will get hammered much worse than single family houses but the same thing applies. It should cost no more to own than rent. If it doesn’t pencil out, just keep on renting. When you do get serious on buying, look for an area with low Mello-Roos if possible. Houses built in the late 90’s probably will not have Mello-Roos and will still be up to the latest construction codes. Anything after say ’99 will probably have a sick tax rate so you’d have to offer even less to make the purchase pencil out. That’s partially why I think condo’s will take a dump – the tax rates are usually high plus you pay a fat HOA fee on top of that. Makes the price you’d be willing to pay even lower. Also, there’s just too many condos around here and most people really want houses. So, buy a condo if you want but make sure it doesn’t cost you more than it would to rent.

[little lady]

Go on Craiglist, check out all the forecloser sales, bank owned and short sales listed, this is just the beginning.

I think I saw one for Paloma del sol for less than 350k bank owned.

That price range can already get you a decent house, I bet it will buy you more by summer……..

[hipmatt]

I agree with former owner nearly 100%. I have lived here since 1990 (Temecula). Temecula is the only city I would consider over here. I have to be honest, I strongly advise you to NOT move here unless you work here. I know so many people who ROT on the 91fwy commuting to the OC. They hate it, some spend at least 4 hours per day in the car commuting. Is that how you want to live your life? There is nothing wrong with renting, especially now. Don’t even ask about the bottom, cause its nowhere in sight. Think 2010ish for that. You know the old saying,… the grass is always greener.

Heres my current pro and con list for the Temecula Valley. I posted it in another thread so I apologize for others who may have read it.

Temecula pros and cons
Pros:
-great weather, I mean GREAT weather (many sunny days)
-one of least smoggy cities in socal(afternoon breeze common)
-general topography is attractive(natural rolling hills/trees)
-relatively close to mountains, beaches, deserts, big cities(LA/SD)
-nice wineries(kind of)and old town(kind of)
-pretty clean and safe
-seems to be great for families and kids(tons of
schools/activities/sports, good schools)
-many churches
-decent amount of parks
-best city planning of all nearby cities(clearly not perfect)
-some nice dinning options
-still some ranches/equestrian left
-Pechanga Casino?(mostly a big CON for me)
-busy mall

Cons:
-growing way too fast
-city traffic is horrible& murrieta even worse
-freeway traffic horrible at times(215 is the worst)
-expensive homes(by nature this may end soon)
-limited singles activity/nightlife
-most careers are in retail/education/Guidant Corp./real estate:( ,very few college degree or corporate type jobs here
-most people with real jobs commute to SD/OC/LA/Riverside and with BAD traffic getting worse and pricey gas getting pricier this is a BIG Con!!!
-even though many, many dinning options, waits can still be over an hour
-Pechanga Casino – causes traffic, gambling addictions, alcoholism, promotes the evil and sin in many(just my .02)
-rat race is here to stay(people in New York City appear to be more mellow)
-rude/materialistic/overly vain/fake/snobby population growing at an alarming rate. The keeping up with the Jonse’s reality show should be filmed here.
-not the quiet ranch like town it once was
-mass transit hasn’t really arrived yet?
-very inconsiderate drivers and many times dangerous. Local drivers are the worst and rudest I’ve seen, yet they seem to be ignored by local PD especially Murrieta PD, but you will get pulled over for tinted windows.
-busy mall is packed full of “Mall Rats” who feast on energy drinks and vanity.
-culturally not that diverse
-Medical facilities are sub-par, packed, and just suck. Best local hospital is in Fallbrook. The two in Murrieta are bad.
-no local rivers and the few local lakes we have are filthy/crowded or not suitable for recreation
-closest 4 year college over 35 min away
-closest community college is 20 min away and is mediocre
-DMV, Costco, IN’n’OUT are BERSERK and require extreme patience almost all the time!!
-even though the city is growing fast and many people live here, it seems that your business still becomes everyone’s business

[FormerOwner]

One other thing about Temecula. Prices have already fallen by 15% in a number of neighborhoods and we’re only at the beginning of the downward spiral so my 50% doesn’t sound as crazy as it did a few months ago. Only 35% to go.

2007 is going to pull the rug out from under this housing bubble due to massive foreclosures and distress sales. I think by this time next year prices overall will be down at least 30% from the peak. But that still won’t be the bottom!

There are going to be possibly > 2,000 houses foreclosing just due to the Stonewood “investment” group alone! Patience!

[Chris Scoreboard Johnston]

Chris Johnston

I am not nearly as bearish as most people in here, but I still feel you should wait. IE will get hit harder than coastal areas, nicer areas historically have always held value better than the lessor areas. That drive is going to be very difficult and a quality of life issue. Wait until the end of 07, if we have not seen a steeper drop begin by then, I don’t think one will happen. This year will tell us alot. If the insiders can keep this thing afloat during this first year of resets, I think we will be able to conclude that a major drop is not going to happen. If they can’t, all bets are off.

[PD]

Regardless of what happens with RE, DO NOT lock yourself into a long commute. You will regret it. Calculate how much you make an hour. Then multiply that by the length of your commute (add in extra, bad accident days can be rough). Now add in all the extra gas and wear and tear on your car (don’t forget much more frequent oil changes, etc). Now you have a pure dollars number. However, you can’t calculate in dollars the value of your happiness. Will all that driving make you happy? Will it be good for your kids (if you have them)? Will it be good for your marriage (if you are married)?

For most people, the answer to all those questions is no, no and hell no.

[ocrenter]

first, you live in South OC, you need to read this to understand mortgage fraud was part of the price build-up and it will accelerate the price decline: Fraudera Ranch: It’s a Family Affair!

second, you are thinking of moving to Temecula Valley. You need to read this to understand that current Temecula housing prices are build on very very shaky foundations that’s about to crumble: Isn’t A $1.2 Billion Fraud Case Big Enough?

My friend that bought in Temecula last June thought he was getting a good bargain. He already lost $100,000 to date. And things haven’t even started to truly unravel! Remember, the center will feel the impact, but the outskirt will be blown to oblivion.

[hipmatt]

Chris Johnston

I am not nearly as bearish as most people in here, but I still feel you should wait. IE will get hit harder than coastal areas, nicer areas historically have always held value better than the lessor areas. That drive is going to be very difficult and a quality of life issue. Wait until the end of 07, if we have not seen a steeper drop begin by then, I don't think one will happen. This year will tell us alot. If the insiders can keep this thing afloat during this first year of resets, I think we will be able to conclude that a major drop is not going to happen. If they can't, all bets are off.

 I don't see how the insiders keeping this thing afloat has anything to do with the inevitable.  Insiders can only postpone the inevitable, with the help of the fed reserve, the drive by media, and most importantly the debt loving, herd of sheep, brainless Americans themselves.  BTW, the longer this is postponed, the worse it will be.  CA real estate IS NOT worth these current prices.  Not even close.  We have covered the fundamentals, the historical prices, incomes vs. home prices, rents vs home prices, all of this over and over again on this board.  The only thing that can keep prices up is a huge increase in wages/incomes and a reduction of inventory.  Neither is going to happen anytime soon.  Especially in Temecula, one of the most "bubblicious" areas in the country.

 

[PerryChase]

I think that the “insiders” know that something is going awry; and I’m sure they are wrecking their brains out trying come up with something to avert massive defaults.

But what can the insiders do? How can they stretch interest-only and negative amortization loans? They are already at infinity. People are sinking into more debt everyday just to “own” their homes.

[gn]

There is more speculations in the Inland Empire. Why ?

There is more land in the IE for builders to build new homes. And speculators prefer new constructions. With new constructions, the purchase price is set at the time that the contract is signed. While prices were going up, the speculator get the appreciation while the home is being built (6 months), without incurring any carrying cost.

This results in more surplus homes in the IE. Thus, more severe price declines.

[ibjames]

keep lurking and learning, get a surfboard and ride the wave.

I had the same problem with the Mrs., show her the hard data, I know it sucks but the data is right there.

Do things that can help. Get a place you like. Buy the curtains, you could even paint it if you like (check when you are shopping for places) do what my wife and I did and buy plants, keep em in pots so you can take them.

I have been in my place almost a year, am a good tenant, wanted motion sensors, different door, things like that, and my landlord happily accomodated me. Renting isn’t too bad especially when the excess money goes to the bank.

[smfj]

During my two years lurking around this site, I’ve gotten the itch to buy from time to time for emotional reasons (yes, I’m female, and yes, I’d love to decorate). But then I look at the hard facts and realize it’s ridiculous. There’s no way I can buy anywhere for what I pay in rent (particularly when you include ALL costs of ownership, such as insurance, repairs…). And, by the way, never let someone convince you that you need the tax deduction – the tax deduction only comes into play when you’re looking at the cost of ownership; you should never spend money for the sake of a tax deduction. Plus, I get to live less than a mile from the ocean in a place I love – not in an inland subdivision like a lot of my home owner friends. And I’m saving money that I can put towards a down payment when the market is more reasonable.

And, speaking of paint – even if you’re technically not allowed to paint, you can still paint, and then either repaint or pay the charge when you move, and you’re probably still better off.

Living in New York for a while, a city full of life-long renters, taught me that not owning a place doesn’t have to make it less of a home. There are plenty of creative ways to decorate a rental- maybe you can convince your wife to see it as a fun challenge.

[Chris Scoreboard Johnston]

Chris Johnston

I am referring to liquidity, that is what is keeping the market from tanking. The Fed will crank up the liguidity even more as the slowing continues, trying to moderate it. Don’t get me wrong, I am in the bearish camp, just not to the degree that some people in here are. I would not live in Temecula even if prices fell 70% there. I prefer to be closer to the coast.

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