Home › Forums › Housing › DR Horton Slashes prices $100k in Murrieta, Menifee, Wildomar and more in …
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May 18, 2007 at 7:34 AM #53505May 18, 2007 at 7:34 AM #53514
The-Shoveler
ParticipantNor_LA-Temcu-SD-Guy
Seems the Builders are leading the price decline, I guess you got to Move inventory to EAT,
You got to EAT.
KB homes is having Big price reductions in the SCV and there is this 50th thing they are doing this weekend .
Hmmm…
May 21, 2007 at 5:45 PM #54213newguy
ParticipantHey everyone,
I’ve been a lurker for awhile now. I just wanted to get off what’s on my mind. Maybe you guys can help shed some advice.
I was looking at the Harveston homes. However, I agree with everyone that the homes in Temecula are overpriced. Right now, 1900-2300 sq ft homes in the Harveston area are selling for the high 400-low 500’s (even mid 500’s!). This translates to around $200/sq ft (or even more).
However, the new homes in Harveston are starting to drop in price (there are like 3-4 new developments in Harveston). What would be a good price for new homes in Harveston? I noticed the homes by DR Horton in the Latour/Biarritz are in the outskirts of Murrieta. But I’m guessing from the location of Harveston, that it is better and can charge higher? What I’m trying to get at, is what do you think Harveston homes should go for? (ie a 2400 sq ft, 4 bed 3 bath home…or a 3000 sq ft 4 bed 4 bath home). Or what should it’s price per sq ft be (if that’s easier)?
Thanks for any advice in advance. I’m looking to move into the Temecula area and I really like the Harveston area. Any insight would be greatly appreciated.
May 21, 2007 at 5:45 PM #54225newguy
ParticipantHey everyone,
I’ve been a lurker for awhile now. I just wanted to get off what’s on my mind. Maybe you guys can help shed some advice.
I was looking at the Harveston homes. However, I agree with everyone that the homes in Temecula are overpriced. Right now, 1900-2300 sq ft homes in the Harveston area are selling for the high 400-low 500’s (even mid 500’s!). This translates to around $200/sq ft (or even more).
However, the new homes in Harveston are starting to drop in price (there are like 3-4 new developments in Harveston). What would be a good price for new homes in Harveston? I noticed the homes by DR Horton in the Latour/Biarritz are in the outskirts of Murrieta. But I’m guessing from the location of Harveston, that it is better and can charge higher? What I’m trying to get at, is what do you think Harveston homes should go for? (ie a 2400 sq ft, 4 bed 3 bath home…or a 3000 sq ft 4 bed 4 bath home). Or what should it’s price per sq ft be (if that’s easier)?
Thanks for any advice in advance. I’m looking to move into the Temecula area and I really like the Harveston area. Any insight would be greatly appreciated.
May 21, 2007 at 7:10 PM #54224no_such_reality
ParticipantBugs, given the number sitting empty out there and the amount foreclosures, I’m beginning to think Riverside et. al. will be lucky to hold 50%.
May 21, 2007 at 7:10 PM #54235no_such_reality
ParticipantBugs, given the number sitting empty out there and the amount foreclosures, I’m beginning to think Riverside et. al. will be lucky to hold 50%.
May 21, 2007 at 7:54 PM #54228Bugs
ParticipantIf a neighborhood started out at $200k in 1997 the natural inflation to 2007 would result in a price just over $255,000. A $255,000 sale price with 5% down would result in a mortgage of $242,250;
At 7%/30 yr amtz that results in a monthly payment of $1,604 + $238 for the property taxes and another $175 for insurance and HOA; and we end up with a PITI payment of $2,017/month; Divide that by 35% and that ends up with a gross income of about $5,760/mont, or $69,154.
By my count, that $69,000 is right in line with the average household incomes in that area. Coincidentally, The $200k house in 1997 probably peaked out at about $500,000 (maybe a touch higher); and a 50% decline off peak would end up at $250k.
We always talk about the correction coming to the long term trendline; we never seem to but touch on the idea that it could actually overshoot and go negative to the trendline. Logically speaking and considering we just had a massive spike the correction basically has to overshoot in order for that trendline to continue on in the same general direction.
I keep getting that nagging suspicion that maybe a 50% is being too conservative. Maybe our regional wage/population trends don’t economically support the absorbtion of the additional 10% more housing we’ve built in the last 10 years. Maybe now that the specuvestors have left the building we’ll end up facing an oversupply of homes that would lead to a period of below trendline pricing.
Maybe 50% isn’t the number we should be anticipating after all.
May 21, 2007 at 7:54 PM #54239Bugs
ParticipantIf a neighborhood started out at $200k in 1997 the natural inflation to 2007 would result in a price just over $255,000. A $255,000 sale price with 5% down would result in a mortgage of $242,250;
At 7%/30 yr amtz that results in a monthly payment of $1,604 + $238 for the property taxes and another $175 for insurance and HOA; and we end up with a PITI payment of $2,017/month; Divide that by 35% and that ends up with a gross income of about $5,760/mont, or $69,154.
By my count, that $69,000 is right in line with the average household incomes in that area. Coincidentally, The $200k house in 1997 probably peaked out at about $500,000 (maybe a touch higher); and a 50% decline off peak would end up at $250k.
We always talk about the correction coming to the long term trendline; we never seem to but touch on the idea that it could actually overshoot and go negative to the trendline. Logically speaking and considering we just had a massive spike the correction basically has to overshoot in order for that trendline to continue on in the same general direction.
I keep getting that nagging suspicion that maybe a 50% is being too conservative. Maybe our regional wage/population trends don’t economically support the absorbtion of the additional 10% more housing we’ve built in the last 10 years. Maybe now that the specuvestors have left the building we’ll end up facing an oversupply of homes that would lead to a period of below trendline pricing.
Maybe 50% isn’t the number we should be anticipating after all.
May 22, 2007 at 12:13 AM #54244gn
Participant“Maybe our regional wage/population trends don’t economically support the absorbtion of the additional 10% more housing we’ve built in the last 10 years. Maybe now that the specuvestors have left the building we’ll end up facing an oversupply of homes that would lead to a period of below trendline pricing”
In other words: Excessive things correct themselves excessively.
Adages like the above were not created out of a vacuum. I would be surprised if the correction does NOT overshoot.
May 22, 2007 at 12:13 AM #54255gn
Participant“Maybe our regional wage/population trends don’t economically support the absorbtion of the additional 10% more housing we’ve built in the last 10 years. Maybe now that the specuvestors have left the building we’ll end up facing an oversupply of homes that would lead to a period of below trendline pricing”
In other words: Excessive things correct themselves excessively.
Adages like the above were not created out of a vacuum. I would be surprised if the correction does NOT overshoot.
May 22, 2007 at 6:05 AM #542484plexowner
ParticipantI’m expecting 1998 prices pretty much across the board – all areas of town, all property types
I am hoping for lower prices (the overshoot Bugs mentions) but this may only happen on selected areas or property types
~
I think even real estate bears are hesitant to talk about 70% declines in public – as you have pointed out Bugs, we have friends and family who will be hurt by this housing correction so we might filter what we say out loud
When I was selling property and the buyer asked why, I would say “I’m expecting a correction and I believe it will be more than the typical 10-15%.”
This is an honest answer and it doesn’t put the other person on the defensive
I maintain a list of all the negatives facing the US economy going forward – when I look at this list it is easy for me to imagine 70% declines in real estate prices but along with the reduced prices comes a depression that will make the 1930s look like a summer holiday at the beach
~
It makes sense to me that the market will find a bottom when rental quality houses are selling near rental value
This is when the investors will step in and buy
To me, this means a 3/1 SFR in Clairemont or North Park is worth no more than $275K (and probably only $225K)
I use ‘Clairemont at $275K’ as my starting point to consider prices in other areas
A view property in Bay Park / Bay Ho won’t cost more than twice the lower end house in Clairemont so I think these view properties will be available for $600K
View property in nicer areas (Mission Hills, Pt Loma, OB, Sunset Cliffs) will cost more but they won’t be twice what a view property in Bay Park is going for – this means there will be view properties in these nice areas for under $1 mil
May 22, 2007 at 6:05 AM #542594plexowner
ParticipantI’m expecting 1998 prices pretty much across the board – all areas of town, all property types
I am hoping for lower prices (the overshoot Bugs mentions) but this may only happen on selected areas or property types
~
I think even real estate bears are hesitant to talk about 70% declines in public – as you have pointed out Bugs, we have friends and family who will be hurt by this housing correction so we might filter what we say out loud
When I was selling property and the buyer asked why, I would say “I’m expecting a correction and I believe it will be more than the typical 10-15%.”
This is an honest answer and it doesn’t put the other person on the defensive
I maintain a list of all the negatives facing the US economy going forward – when I look at this list it is easy for me to imagine 70% declines in real estate prices but along with the reduced prices comes a depression that will make the 1930s look like a summer holiday at the beach
~
It makes sense to me that the market will find a bottom when rental quality houses are selling near rental value
This is when the investors will step in and buy
To me, this means a 3/1 SFR in Clairemont or North Park is worth no more than $275K (and probably only $225K)
I use ‘Clairemont at $275K’ as my starting point to consider prices in other areas
A view property in Bay Park / Bay Ho won’t cost more than twice the lower end house in Clairemont so I think these view properties will be available for $600K
View property in nicer areas (Mission Hills, Pt Loma, OB, Sunset Cliffs) will cost more but they won’t be twice what a view property in Bay Park is going for – this means there will be view properties in these nice areas for under $1 mil
May 22, 2007 at 6:46 AM #54252PD
ParticipantThere are certain areas where it seems probable that prices will correct over 50%. A while back I walked through some townhouses in Chula Vista near the trolley station. They were garbage – small, poorly built with tiny patio yards. The asking price was over 500k! A 500k starter home at current wages is insane! Even at 250k, these townhomes are out of range of the target buyer. I bet over 95% of the buyers of these properties have 100% LTV. So how many will go to foreclosure?
May 22, 2007 at 6:46 AM #54264PD
ParticipantThere are certain areas where it seems probable that prices will correct over 50%. A while back I walked through some townhouses in Chula Vista near the trolley station. They were garbage – small, poorly built with tiny patio yards. The asking price was over 500k! A 500k starter home at current wages is insane! Even at 250k, these townhomes are out of range of the target buyer. I bet over 95% of the buyers of these properties have 100% LTV. So how many will go to foreclosure?
May 22, 2007 at 7:22 AM #54254The-Shoveler
ParticipantNor_LA-Temcu-SD-Guy
What would happen if the Builders reset the prices back to 2003/early 2004 in a few months time frame and then resume more normal price appreciation 5% to 8% a year.
This I think would be in everyone best interest,
Not likely I know but seeing what the builders have been doing in Riverside and SCV the last few weeks hmmm Maybe ???
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