DON’T BE SHY! SELLER WILL ENTERTAIN OFFERS BETWEEN $319,000 AND $404,000.

[pizzaman]

Median income of 92592 is 69k, traditional median home prices are 5-7x median income (350 on a down year and 470k in a good year).

TG – Generally I agree with your conclusions however I believe you may be wrong that the median home price in Temecula is traditionally 5-7x median income. According to City-Data.com the median income in Temecula in 2000 was $59,516 and the median home price was $190,100 roughly 3x income. I think there is an argument to be made that the median home price will return to this level. 69k x 3 = 207k, only time will tell.
On a side note an insane amount of info about Temecula can be found here http://www.cityoftemecula.org/NR/rdonlyres/6089BD40-13DB-409D-9A35-FC89D90479F8/0/husingreport2007.pdf

[kev374]

median home prices are usually 2-3 times median income. In case of SoCal I believe it is around 3.

[kev374]

median home prices are usually 2-3 times median income. In case of SoCal I believe it is around 3.

[kev374]

median home prices are usually 2-3 times median income. In case of SoCal I believe it is around 3.

[kev374]

median home prices are usually 2-3 times median income. In case of SoCal I believe it is around 3.

[kev374]

median home prices are usually 2-3 times median income. In case of SoCal I believe it is around 3.

[Eugene]

There’s no point talking about ratios of home price to income or home price to rent. You are ignoring a big factor – interest rates. $59,000 income will support higher home prices with 6% rates than with 8% rates. A more meaningful measure is the ratio of a median home payment to a median family income. It was historically around 15% in areas with lots of free land and maybe 25% in highly desirable places with limited land like San Diego or Bay Area. (Before the age of creative financing, it couldn’t even climb much higher than 28% because you couldn’t qualify for a mortgage if your payments were more than 28% of your income!)

2000-2001 prices in Temecula are possible but improbable. Interest rates are lower and incomes are much higher today than in 2001. Overbuilding won’t matter much because San Diego will always be there to deal with excess inventory.

[Eugene]

There’s no point talking about ratios of home price to income or home price to rent. You are ignoring a big factor – interest rates. $59,000 income will support higher home prices with 6% rates than with 8% rates. A more meaningful measure is the ratio of a median home payment to a median family income. It was historically around 15% in areas with lots of free land and maybe 25% in highly desirable places with limited land like San Diego or Bay Area. (Before the age of creative financing, it couldn’t even climb much higher than 28% because you couldn’t qualify for a mortgage if your payments were more than 28% of your income!)

2000-2001 prices in Temecula are possible but improbable. Interest rates are lower and incomes are much higher today than in 2001. Overbuilding won’t matter much because San Diego will always be there to deal with excess inventory.

[Eugene]

There’s no point talking about ratios of home price to income or home price to rent. You are ignoring a big factor – interest rates. $59,000 income will support higher home prices with 6% rates than with 8% rates. A more meaningful measure is the ratio of a median home payment to a median family income. It was historically around 15% in areas with lots of free land and maybe 25% in highly desirable places with limited land like San Diego or Bay Area. (Before the age of creative financing, it couldn’t even climb much higher than 28% because you couldn’t qualify for a mortgage if your payments were more than 28% of your income!)

2000-2001 prices in Temecula are possible but improbable. Interest rates are lower and incomes are much higher today than in 2001. Overbuilding won’t matter much because San Diego will always be there to deal with excess inventory.

[Eugene]

There’s no point talking about ratios of home price to income or home price to rent. You are ignoring a big factor – interest rates. $59,000 income will support higher home prices with 6% rates than with 8% rates. A more meaningful measure is the ratio of a median home payment to a median family income. It was historically around 15% in areas with lots of free land and maybe 25% in highly desirable places with limited land like San Diego or Bay Area. (Before the age of creative financing, it couldn’t even climb much higher than 28% because you couldn’t qualify for a mortgage if your payments were more than 28% of your income!)

2000-2001 prices in Temecula are possible but improbable. Interest rates are lower and incomes are much higher today than in 2001. Overbuilding won’t matter much because San Diego will always be there to deal with excess inventory.

[Eugene]

There’s no point talking about ratios of home price to income or home price to rent. You are ignoring a big factor – interest rates. $59,000 income will support higher home prices with 6% rates than with 8% rates. A more meaningful measure is the ratio of a median home payment to a median family income. It was historically around 15% in areas with lots of free land and maybe 25% in highly desirable places with limited land like San Diego or Bay Area. (Before the age of creative financing, it couldn’t even climb much higher than 28% because you couldn’t qualify for a mortgage if your payments were more than 28% of your income!)

2000-2001 prices in Temecula are possible but improbable. Interest rates are lower and incomes are much higher today than in 2001. Overbuilding won’t matter much because San Diego will always be there to deal with excess inventory.

[pizzaman]

OK esmith we’ll do it your way. I plugged these numbers into the handy dandy money.com What can I afford? calculator. Income 69,000, Down payment 50,000, Interest rate 6%, Taxes and insurance $4000 and the magic # is $262,000. So there you have it the median home price in Temecula using traditional lending standards should be $262,000 (at 28% DTI) which was roughly where it stood in the middle of 2002.

So next summer when the median hits $260,000 I’m going to buy a house (because renting sucks) and hope that we don’t overshoot and end up with 2001 prices. I feel so much better now that I have a plan.

[pizzaman]

OK esmith we’ll do it your way. I plugged these numbers into the handy dandy money.com What can I afford? calculator. Income 69,000, Down payment 50,000, Interest rate 6%, Taxes and insurance $4000 and the magic # is $262,000. So there you have it the median home price in Temecula using traditional lending standards should be $262,000 (at 28% DTI) which was roughly where it stood in the middle of 2002.

So next summer when the median hits $260,000 I’m going to buy a house (because renting sucks) and hope that we don’t overshoot and end up with 2001 prices. I feel so much better now that I have a plan.

[pizzaman]

OK esmith we’ll do it your way. I plugged these numbers into the handy dandy money.com What can I afford? calculator. Income 69,000, Down payment 50,000, Interest rate 6%, Taxes and insurance $4000 and the magic # is $262,000. So there you have it the median home price in Temecula using traditional lending standards should be $262,000 (at 28% DTI) which was roughly where it stood in the middle of 2002.

So next summer when the median hits $260,000 I’m going to buy a house (because renting sucks) and hope that we don’t overshoot and end up with 2001 prices. I feel so much better now that I have a plan.

[pizzaman]

OK esmith we’ll do it your way. I plugged these numbers into the handy dandy money.com What can I afford? calculator. Income 69,000, Down payment 50,000, Interest rate 6%, Taxes and insurance $4000 and the magic # is $262,000. So there you have it the median home price in Temecula using traditional lending standards should be $262,000 (at 28% DTI) which was roughly where it stood in the middle of 2002.

So next summer when the median hits $260,000 I’m going to buy a house (because renting sucks) and hope that we don’t overshoot and end up with 2001 prices. I feel so much better now that I have a plan.

[Author]

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