Home › Forums › Housing › DR Horton Slashes prices $100k in Murrieta, Menifee, Wildomar and more in …
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23109VC.
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May 22, 2007 at 7:22 AM #54266May 22, 2007 at 8:41 AM #54269
Bugs
ParticipantThe single biggest “cost” increase the builders have actually incurred is the cost of the land. If a builder bought land in 2002, they can’t very well discount past retail SFR values of 2002 without running into losses.
As I see it, a 50% decline off peak basically has to result in massive losses for the builders who are still exposed. A 70% decline puts most of them out of business, or at least, cut back to their management staff and sitting in hibernation while they wait it out.
FYI, new home production in SD County dropped from 12,000 – 13,000 per year in the late 80s thru 1990, to as low as <4,100 - 5,100 during the years of 1992-1997. The 12,000 mark didn't come up again until yr2000 (12,166).
And the spike of 1989 was about 1/3 the size of the spike we just came off of.
May 22, 2007 at 8:41 AM #54282Bugs
ParticipantThe single biggest “cost” increase the builders have actually incurred is the cost of the land. If a builder bought land in 2002, they can’t very well discount past retail SFR values of 2002 without running into losses.
As I see it, a 50% decline off peak basically has to result in massive losses for the builders who are still exposed. A 70% decline puts most of them out of business, or at least, cut back to their management staff and sitting in hibernation while they wait it out.
FYI, new home production in SD County dropped from 12,000 – 13,000 per year in the late 80s thru 1990, to as low as <4,100 - 5,100 during the years of 1992-1997. The 12,000 mark didn't come up again until yr2000 (12,166).
And the spike of 1989 was about 1/3 the size of the spike we just came off of.
May 22, 2007 at 9:47 AM #54291gn
ParticipantFYI, new home production in SD County dropped from 12,000 – 13,000 per year in the late 80s thru 1990, to as low as ???
Bugs, I think you left out some number.
May 22, 2007 at 9:47 AM #54304gn
ParticipantFYI, new home production in SD County dropped from 12,000 – 13,000 per year in the late 80s thru 1990, to as low as ???
Bugs, I think you left out some number.
May 22, 2007 at 10:39 AM #5430523109VC
Participantnew guy –
i rent/live in harveston. My wife and I really like it. fo rour needs it is perfect. I work 5 min away – so the commute is great. π we hav small kids, so the parks, the lake, pool/spa facilities are very nice. while some people here on piggington have scoffed at the lake and called it a “pond” – i personally like it a lot. it’s very peaceful, relaxing – and it’s a nice place to take an evening walk at with the kids. we’ve lived there almost a year, and we still take a walk around the lake at least once or twice a week. out of many of the neighborhoods in temecula – we like Harveston a LOT. it’s nto the most pricey or upscale area – but it’s very nice.
as to the DR horton properties discussed in this thread – one caveat I would say about that area – and i can’t say why…as the prices seem similar to harveston and other areas further south – when I have driven many of the neighborhoods that are in that area – right near french valley/winchester – in general the neighborhoods do not feel as nice. the yards tend to have a more neglected look to them. I see a lot of *this* type of house:
big giant lifted 4×4 in the driveway – garage door (3-4 car garage) is open and you can see 2 jetskis, 3 motorcycles, and a boat all jammed into the garage. There may be an RV on the side of the house. theer is some blond bimbo wife in the driveway with her fake tits washing the hummer….and their lawn is brown/dead and weeds are piling up all over the yard.
the house next door has 4 beater cars stacked up in teh driveway – along with the dead lawn/weeds.
it seems like you find more of the people who blew every cent on their toys – and let their house go down the drain – and you see the 3-4 families who all pile into onc ehouse to afford the payment.
i see MUCH MUCH less of any of that in harveston. now harveston does have a condo development and an apartmetn complex… but the housing areas in general are more well kept. the hoas maintain common areas, and peole who let their yard go will get fined and hounded by the association. some people hate HOAs like that – i lke them. i don’t want my neighbor to decide to let the yard go to crap while he spends every weekend drinking beer on his boat… i like my neighborhood to look nice.
as to pricing – i have noticed some of the newer areas being priced a bit lower. prescott is one area – but it’s outside of the main harveston area. i drove through it and the houses are even more crammed in that the original harveston area – and you are NOT walking distance to any of the amenities . i personally did not like prescott…. there are a couple areas being build on the west end by meritage? one was cheaper/smaller…i dind’t caer for them. they were 1600-2000 sq ft homes, but they are two stories and they had that cramped feel. to me, 1600sq ft in a two story feels small…the footprint on the ground is tiny and you feel it. the family room felt claustrophobic.
the other property meritage is selling was larger – but more $$. i want to say mid to high 400s. closer to 500s. all fo them were two stories – which I hate.
if you want aone story – you’re in trouble. 90% of what they have built in tem/murr is a two story. in harveston – there are probably like 50 one stories out of about 500 homes.. seriously… hard to find.
overall – harveston is a nice spot. if you commute to SD – then you might be better seved to look further south..but if you live/work locally – harveston is a great area. to me, if you have af amily/kids – harveston is a nice place to live.
where will pricing on this stuff go? hard to say. i personally don’t thnk temecula is going to go down the drain liek the other piggington peple here think. i think we have mor eprice drops in store…but i think it will go down slower…over time…so that the actual drops don’t look that big…but if you look at it over time, and take into account inflation, it will actually be larger than you see. i’m not a RE pro..so don’t take my word for it, that’s just what i think based on all the info i’ve absorbed.
i see prices dropping another 5-10%/year…maybe for 2-3 yers…then either going flat or going back up.
figure historically, prices should go up 3-5% /year max. the bubble blew that away… and stuff will drop down until it finally comes back in line with that.
so if a $500k house should have been selling for $250k in 2002…and you factor in another 3-5%/year….from 2002 to 2007, you wind up with these houses in the low 300s.
that’s what i think. so all these homes taht are listing for 450-500…expect them to bottom out at 300-325…
if all of harveston fell to 200k…llike the doom and gloomers say – you will see people walk away from their homes in MASS and we will go into a depression. there was so much growth in temecula since the boom..there are NOT many people who can just say “oh i’m 200k upside down, i’ll just ride it out”. even the smart people will do the numbers and realize it makes sense to just bail on the mortrgage. and go into foreclosure to avoid a 200k loss.
if the drop is 50-100k…and prices are only dropping small amoutns year over year…they can reationalize sitting tight.
if someone bought in 2004 for $500k and in two years the house is wroth $200k…they will walk. what idiot would stay and pay? i’ll tell you what they will do – they will find their dream hosue..that used to be 800k that is now only 350k…and they will buy it…they’ll lie through their teeth on loan apps to say the existing house is rented..at enogh to cover the mortgage..and the second they clsoe on th new house they will let the old one go into foreclosure..and not care about their credit as they figure they bougth their dream house…
if stuff falls that badly – what will stop thep eople who had no problem taking our ARMS/neg ams…from doing the same toxic/loan fraud crap all over again to “upgrade” to their new dream house.. ???
but i saw if you can get that house you like in harveston in the range of 300-325 you are safe. pay 450-500 and you will be upside down in a year or two
May 22, 2007 at 10:39 AM #5431823109VC
Participantnew guy –
i rent/live in harveston. My wife and I really like it. fo rour needs it is perfect. I work 5 min away – so the commute is great. π we hav small kids, so the parks, the lake, pool/spa facilities are very nice. while some people here on piggington have scoffed at the lake and called it a “pond” – i personally like it a lot. it’s very peaceful, relaxing – and it’s a nice place to take an evening walk at with the kids. we’ve lived there almost a year, and we still take a walk around the lake at least once or twice a week. out of many of the neighborhoods in temecula – we like Harveston a LOT. it’s nto the most pricey or upscale area – but it’s very nice.
as to the DR horton properties discussed in this thread – one caveat I would say about that area – and i can’t say why…as the prices seem similar to harveston and other areas further south – when I have driven many of the neighborhoods that are in that area – right near french valley/winchester – in general the neighborhoods do not feel as nice. the yards tend to have a more neglected look to them. I see a lot of *this* type of house:
big giant lifted 4×4 in the driveway – garage door (3-4 car garage) is open and you can see 2 jetskis, 3 motorcycles, and a boat all jammed into the garage. There may be an RV on the side of the house. theer is some blond bimbo wife in the driveway with her fake tits washing the hummer….and their lawn is brown/dead and weeds are piling up all over the yard.
the house next door has 4 beater cars stacked up in teh driveway – along with the dead lawn/weeds.
it seems like you find more of the people who blew every cent on their toys – and let their house go down the drain – and you see the 3-4 families who all pile into onc ehouse to afford the payment.
i see MUCH MUCH less of any of that in harveston. now harveston does have a condo development and an apartmetn complex… but the housing areas in general are more well kept. the hoas maintain common areas, and peole who let their yard go will get fined and hounded by the association. some people hate HOAs like that – i lke them. i don’t want my neighbor to decide to let the yard go to crap while he spends every weekend drinking beer on his boat… i like my neighborhood to look nice.
as to pricing – i have noticed some of the newer areas being priced a bit lower. prescott is one area – but it’s outside of the main harveston area. i drove through it and the houses are even more crammed in that the original harveston area – and you are NOT walking distance to any of the amenities . i personally did not like prescott…. there are a couple areas being build on the west end by meritage? one was cheaper/smaller…i dind’t caer for them. they were 1600-2000 sq ft homes, but they are two stories and they had that cramped feel. to me, 1600sq ft in a two story feels small…the footprint on the ground is tiny and you feel it. the family room felt claustrophobic.
the other property meritage is selling was larger – but more $$. i want to say mid to high 400s. closer to 500s. all fo them were two stories – which I hate.
if you want aone story – you’re in trouble. 90% of what they have built in tem/murr is a two story. in harveston – there are probably like 50 one stories out of about 500 homes.. seriously… hard to find.
overall – harveston is a nice spot. if you commute to SD – then you might be better seved to look further south..but if you live/work locally – harveston is a great area. to me, if you have af amily/kids – harveston is a nice place to live.
where will pricing on this stuff go? hard to say. i personally don’t thnk temecula is going to go down the drain liek the other piggington peple here think. i think we have mor eprice drops in store…but i think it will go down slower…over time…so that the actual drops don’t look that big…but if you look at it over time, and take into account inflation, it will actually be larger than you see. i’m not a RE pro..so don’t take my word for it, that’s just what i think based on all the info i’ve absorbed.
i see prices dropping another 5-10%/year…maybe for 2-3 yers…then either going flat or going back up.
figure historically, prices should go up 3-5% /year max. the bubble blew that away… and stuff will drop down until it finally comes back in line with that.
so if a $500k house should have been selling for $250k in 2002…and you factor in another 3-5%/year….from 2002 to 2007, you wind up with these houses in the low 300s.
that’s what i think. so all these homes taht are listing for 450-500…expect them to bottom out at 300-325…
if all of harveston fell to 200k…llike the doom and gloomers say – you will see people walk away from their homes in MASS and we will go into a depression. there was so much growth in temecula since the boom..there are NOT many people who can just say “oh i’m 200k upside down, i’ll just ride it out”. even the smart people will do the numbers and realize it makes sense to just bail on the mortrgage. and go into foreclosure to avoid a 200k loss.
if the drop is 50-100k…and prices are only dropping small amoutns year over year…they can reationalize sitting tight.
if someone bought in 2004 for $500k and in two years the house is wroth $200k…they will walk. what idiot would stay and pay? i’ll tell you what they will do – they will find their dream hosue..that used to be 800k that is now only 350k…and they will buy it…they’ll lie through their teeth on loan apps to say the existing house is rented..at enogh to cover the mortgage..and the second they clsoe on th new house they will let the old one go into foreclosure..and not care about their credit as they figure they bougth their dream house…
if stuff falls that badly – what will stop thep eople who had no problem taking our ARMS/neg ams…from doing the same toxic/loan fraud crap all over again to “upgrade” to their new dream house.. ???
but i saw if you can get that house you like in harveston in the range of 300-325 you are safe. pay 450-500 and you will be upside down in a year or two
May 22, 2007 at 12:00 PM #54333newguy
Participant23109VC
Thanks for the reply. I agree with DR Horton. The community there isn’t…nice. But for the price, it will probably attract a bit of people to just look at their homes (with their incentives).
Just to clarify, for 300-325, what kind of home are you talking about? 1900 sq ft (3/2.5)? or 2700 sq ft(4/3)? or even 3600 sq ft (5/4)?
I’ve looked at the homes that Lennar are building (Prescott, Barrington, and Emery Place), and they’re asking for a bit less than the Meritage homes. Right now though, people selling their homes are selling 1900-2400 sq ft homes for mid 400’s to low 500’s (off zillow). That’s about $200-225/sq ft. However, Meritage is selling their new homes for about $170-180/sq ft (2300 sq ft for about 400K). I’m thinking to myself, why buy used when I can buy new for cheaper? But I’m starting to think that $170-180/sq ft is still too high, even for a new home (with all the appliances, new flooring etc).
DR Horton is selling their homes for 421K at 3700 sq ft. That’s about $115/sq ft! Granted it’s location isn’t good, but will Harveston see the same $/sq ft? $115/sq ft is getting close to 2001-2002 prices, before the housing market went crazy (unless 2001-2002 was already crazy).
May 22, 2007 at 12:00 PM #54345newguy
Participant23109VC
Thanks for the reply. I agree with DR Horton. The community there isn’t…nice. But for the price, it will probably attract a bit of people to just look at their homes (with their incentives).
Just to clarify, for 300-325, what kind of home are you talking about? 1900 sq ft (3/2.5)? or 2700 sq ft(4/3)? or even 3600 sq ft (5/4)?
I’ve looked at the homes that Lennar are building (Prescott, Barrington, and Emery Place), and they’re asking for a bit less than the Meritage homes. Right now though, people selling their homes are selling 1900-2400 sq ft homes for mid 400’s to low 500’s (off zillow). That’s about $200-225/sq ft. However, Meritage is selling their new homes for about $170-180/sq ft (2300 sq ft for about 400K). I’m thinking to myself, why buy used when I can buy new for cheaper? But I’m starting to think that $170-180/sq ft is still too high, even for a new home (with all the appliances, new flooring etc).
DR Horton is selling their homes for 421K at 3700 sq ft. That’s about $115/sq ft! Granted it’s location isn’t good, but will Harveston see the same $/sq ft? $115/sq ft is getting close to 2001-2002 prices, before the housing market went crazy (unless 2001-2002 was already crazy).
May 22, 2007 at 12:48 PM #54344gn
Participant“if stuff falls that badly – what will stop thep eople who had no problem taking our ARMS/neg ams…from doing the same toxic/loan fraud crap all over again to “upgrade” to their new dream house.. ???”
23109VC, for a moment, I thought you are joking.
You are assumming that the lenders will continue to hand out toxic/negative amortization loans. Lenders are already in the process tightening credit standards.
Lenders have to protect their interests. The more home prices go down, the harder lenders will make it to obtain home loans.
You must be joking, right ? π
May 22, 2007 at 12:48 PM #54355gn
Participant“if stuff falls that badly – what will stop thep eople who had no problem taking our ARMS/neg ams…from doing the same toxic/loan fraud crap all over again to “upgrade” to their new dream house.. ???”
23109VC, for a moment, I thought you are joking.
You are assumming that the lenders will continue to hand out toxic/negative amortization loans. Lenders are already in the process tightening credit standards.
Lenders have to protect their interests. The more home prices go down, the harder lenders will make it to obtain home loans.
You must be joking, right ? π
May 22, 2007 at 12:57 PM #54348The-Shoveler
ParticipantNor_LA-Temcu-SD-Guy
I think we will be lucky to see 2003 prices myself, the
“421K at 3700 sq ft” price seems like a mid/early 2004 price.Anyway that was not the reason for the post,
In that area (French valley) I think won’t seem so far out in the boonies once the Super Target Mall area and Home Depot are built and Clinton Keith in completed.
But maybe not still as nice as the Harveston tract if you can get close to the same price/SQF .
Hard to say what will happen for sure, Don’t think the Government will let a recession happen at any cost myself.
Too much at stake (pensions/Banks etc..).
May 22, 2007 at 12:57 PM #54359The-Shoveler
ParticipantNor_LA-Temcu-SD-Guy
I think we will be lucky to see 2003 prices myself, the
“421K at 3700 sq ft” price seems like a mid/early 2004 price.Anyway that was not the reason for the post,
In that area (French valley) I think won’t seem so far out in the boonies once the Super Target Mall area and Home Depot are built and Clinton Keith in completed.
But maybe not still as nice as the Harveston tract if you can get close to the same price/SQF .
Hard to say what will happen for sure, Don’t think the Government will let a recession happen at any cost myself.
Too much at stake (pensions/Banks etc..).
May 22, 2007 at 1:07 PM #5435223109VC
Participantno i’m not joking….
ok – the subprime people who CAN’T qualify for a loan – unless they lie about income/debts etc will be out of luck period.
But the people who CAN get loans, who see thier 500k investment suddenly worth $200k….are now $300k in the hole..on something worth $200k…
if they find a $350k house that “used” to be $800k+ and is their “dream” home…and they can qualify for $350k… what would stop that person from buying the 350k home…lying about the prior one being “rented” and lie about the “rent” to GET IN the new home – then to just walk away from the $300k LOSS??
I have heard of people doing this in the last bust. if people are willing to fudge on loan apps, buy 8 houses on zero income – do you really think that SOME people won’t perpetrate another form of fraud to unload their bad decision and simultaneously “upgrade” to a better house?
i know one person who bought house #2 while owning house #1 hosue #1 was NOT rented, but he lied and said it was. he had EXCELLENT credit, a HIGH income…but was living in house #1 while he was trying to close a deal on house #2. he actually had the cash to float both until he WAS able to rent #1…and ultimately it all worked out. he now has TWO houses…one is rented..but at the time of hte loan app..there was fraud going on. and he was NOT s subprime person.
who’s to say that when the $hit hits the fan – you won’t have these same peple doing the same thing, only not even bothering to rent out the old one..they get thehouse they want…and then they just let the old one go…
i think the 1900-2200 sq ft stuff in Harveston will be at the 300a-325k point.
the prescott homes are a bit larger – but the location within harveston sucks. the meritage homes – the small ones are too small. they are sub 2000 sq ft, they feel even smaller, and they are alrady at the 400k point. i personally think these will also fall down to the low 300s.
the larger 2500+ sq ft homes are not going to fall as low as 300k flat. maybe 400?
last time i checked, the Larger meritage homes were not in the low 400s..they were in the upper 400s to low 500s. have they come down since i last looked? they are larger homes…closer to 3000 sq ft on average…only downside is once again they are not walking distance to the lake and they are very close to date street which means you will get road noise in your backyard. Date st will eventually connect to the freeway – and will be very busy.
i just don’t see prices tanking as bad as the average piggington person. i think they will drop..but i think the drops will be smaller. the builders are making some big drops…but the only ones i’ve seen come down substantially are the ones that either WAY overpriced, or in areas that are less desirable. like the DR horton ones. bad area within tem/murr. i would not want to live in that area. it’s not THAT far from harveston, but far enough. id’ rather be in temecula than murrieta anyway.
i haven’t seen anything in harveston that was under 400k. i saw one short sale advertised at 399k…but no idea if that is a legit deal or a low asking price to stimulate offers..who knows if the bank will even tak eit..i’ve seen cottages OFF the lak in the low 400s. most other ones in the 1900-2200 sq ft range are mid 400s to high 400s.
the larger homes…the ones that are 2400-2500+ are 500k+ still. i don’t see any of those homes slashing prices 100k.
May 22, 2007 at 1:07 PM #5436323109VC
Participantno i’m not joking….
ok – the subprime people who CAN’T qualify for a loan – unless they lie about income/debts etc will be out of luck period.
But the people who CAN get loans, who see thier 500k investment suddenly worth $200k….are now $300k in the hole..on something worth $200k…
if they find a $350k house that “used” to be $800k+ and is their “dream” home…and they can qualify for $350k… what would stop that person from buying the 350k home…lying about the prior one being “rented” and lie about the “rent” to GET IN the new home – then to just walk away from the $300k LOSS??
I have heard of people doing this in the last bust. if people are willing to fudge on loan apps, buy 8 houses on zero income – do you really think that SOME people won’t perpetrate another form of fraud to unload their bad decision and simultaneously “upgrade” to a better house?
i know one person who bought house #2 while owning house #1 hosue #1 was NOT rented, but he lied and said it was. he had EXCELLENT credit, a HIGH income…but was living in house #1 while he was trying to close a deal on house #2. he actually had the cash to float both until he WAS able to rent #1…and ultimately it all worked out. he now has TWO houses…one is rented..but at the time of hte loan app..there was fraud going on. and he was NOT s subprime person.
who’s to say that when the $hit hits the fan – you won’t have these same peple doing the same thing, only not even bothering to rent out the old one..they get thehouse they want…and then they just let the old one go…
i think the 1900-2200 sq ft stuff in Harveston will be at the 300a-325k point.
the prescott homes are a bit larger – but the location within harveston sucks. the meritage homes – the small ones are too small. they are sub 2000 sq ft, they feel even smaller, and they are alrady at the 400k point. i personally think these will also fall down to the low 300s.
the larger 2500+ sq ft homes are not going to fall as low as 300k flat. maybe 400?
last time i checked, the Larger meritage homes were not in the low 400s..they were in the upper 400s to low 500s. have they come down since i last looked? they are larger homes…closer to 3000 sq ft on average…only downside is once again they are not walking distance to the lake and they are very close to date street which means you will get road noise in your backyard. Date st will eventually connect to the freeway – and will be very busy.
i just don’t see prices tanking as bad as the average piggington person. i think they will drop..but i think the drops will be smaller. the builders are making some big drops…but the only ones i’ve seen come down substantially are the ones that either WAY overpriced, or in areas that are less desirable. like the DR horton ones. bad area within tem/murr. i would not want to live in that area. it’s not THAT far from harveston, but far enough. id’ rather be in temecula than murrieta anyway.
i haven’t seen anything in harveston that was under 400k. i saw one short sale advertised at 399k…but no idea if that is a legit deal or a low asking price to stimulate offers..who knows if the bank will even tak eit..i’ve seen cottages OFF the lak in the low 400s. most other ones in the 1900-2200 sq ft range are mid 400s to high 400s.
the larger homes…the ones that are 2400-2500+ are 500k+ still. i don’t see any of those homes slashing prices 100k.
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