Our Street in Murrieta

[mydogsarelazy]

Hello All,

Here is the report from one cul-de-sac in Murrieta.

We closed escrow on our new home 2 years ago on a cul de sac with big beautiful houses. Several went to speculators who rented them out, and most sold new for around $400k. Don’t worry, we have a small 15 year fixed mortgage on ours and are here whatever happens to the market.

Now, directly across from us, the same model as ours has a brown lawn and stained carpeting. The sign says “Bank Repo” and the asking price is $539k. The front door is unlocked for sort of a do-it-yourself Open House.

On the counter in the kitchen is an “Interest List” and next to it is a scrawled note “I have a friend who will pay $400k max…” with a phone number.

The house next door to it just got a “For Sale” sign yesterday.

Can you hear the thud of dropping prices? The cries of speculators? The groans of bank officers?

JS

[PerryChase]

I find it surprising that you’d want to stay in that neighborhood and watch it go down, down… ?

[mydogsarelazy]

Hi Perry,

I have an excellent job not far away, and I think some of our neighbors are solid.

Yes, I do anticipate that I will see decline in this neiborhood, but I doubt there are many neighborhoods in Southern California where we won’t see all the problems of shrinking values and over over-burdened home buyers causing problems.

The problems coming down the pike are going to be societal problems not just neighborhood ones.

JS

[JES]

Interesting situation and it almost makes me want to drive to your neighborhood just to check out this ‘auto pilot’ open house!

Sounds like it makes sense for you to stay put for now if you plan to be here for the next 10-20 years. Having recently sold a home in Feb. in a newer San Marcos neighborhood I have some similar experiences. One realtor owned 3 x homes, and she moved from one to the next as she sold them. Another 3-4 (that I know about) homes were bought by Centex employees and flipped within a year. One was the best lot in the neighborhood and he sold it for 300k+ more than he paid in 1 year. – gee, I wonder how he landed that one! In phases 1-4 (heavy investor phases until Centex started some new rules) 10-15 homes have been flipped 2 or 3 times now. We were the only home for sale in Jan, but now there are 12+ homes, all sitting and none in escorw. Prices are all reduced. We decided to sell in January because literally 75% of the people on my street indicated to us that they were also considering selling this summer and I wanted to sell before them.

Our new ‘established’ area in Encinitas where we rent a home now (15 year old homes) is the exact opposite. No homes for sale, nobody in over their head because almost all bought when prices were low, no investors. I do think there is a case to be made that neighborhoods like yours may see a steeper decline than areas like this. In the future I plan to be very cautious about where I buy and will try to steer clear of brand new communities. None of this is reason for you to sell though since the transaction costs and trouble of selling would likely outweigh and difference!

[JES]

Here’s the house I was talking about that was bought by a Centex employee:

380 Shelley Dr., San Marcos, CA 92078

Original Purchase:
2005 Total assessed value: = $548,239

Flip:
Sold in 2005 for approx $860,000

[waiting hawk]

mydogsarelazy ya most around Temecula/Murrieta are ~2004 prices already. I told my wife we are on track when we see a regular small 3 Bedroom nothing special average lot size listed for $299,999 in The CITY of Temecula by the winter. One guy just dropped 2 days ago to $330,000 so I am right on target 🙂 (he paid $143 and can dump more than most I assume)

I like that area as I have some friends that live in Murrieta and French Valley. I really like Temecula cause of the schools and my wife is a teacher. We plan on moving there once this market does whatever it’s going to do (which I tell regular people) but I mean once the market takes a dive there. That place should not climb up the same percentage as La Jolla, LA, or Del Mar. It’s a commuter’s mess in the desert (but gold in my weird view). With wife teaching there and my Territory is San Diego, Orange County, and Riverside. It’s perfectly located and I will put 50% down on a home when we buy. 40%-50% depending on how far it comes down. Maybe we hook up sometime.. I don’t know to many people down there 🙂

PS.. and it’s 5 degrees cooler there than crappy Inland Empire.

Edit: I would stay also and just pay it off in 15 years like you are doing rather than watch this market consistantly and put so much on hold like I am doing 🙁

My website tracking Temecula and South Riverside County

[FormerOwner]

I feel that the R/E values in the Temecula Valley will fall quite a bit also; I think a 50% drop from 2005 prices may be conservative, but that’s just my guess. However, like a couple of other people on here, I like the area and work locally.

I 100% agree that the CITY of Temecula is the best place to be. The traffic in French Valley is beyond ridiculous and there are very few amenities there. Murrieta is better than French Valley, but the Eastern side suffers from the same traffic gridlock issues. The city of Temecula is great as long as you don’t can work locally, at home, or have a travel job – once the prices get a haircut. I’ve noticed real estate ads for French Valley homes falsely stating that they’re in Temecula. Once you’ve lived around here for a while, you know that there’s a BIG difference in quality of life. Temecula seems to have pretty decent urban planning (for the Inland Empire). Most of the tracts have walking trails and parks. Winchester Road is a nightmare but that’s run by the State – nuff said. Rancho California Rd has a much better traffic flow and there are some older (by Temecula standards) neighborhoods with low tax rates there – plus good schools.

I would like it if Temecula was less car-centric and had some walking/bike bridges to cross over major roads. Overall, though, I like it here and will probably stick around.

[waiting hawk]

I like area around Vista California (I think) and Margarita. Near that park and TVH High. That area is little older (1980’s) have homes that I like (lot of 3 car garages) and are already cheaper. French Valley may have a large chance to end up like Moreno Valley if RE seriously takes a large dive. Price relects between the cities. But I really would rather live in Temecula. If I could, I would live on one of those 3 acre lots and live like the unibomber 🙂 The chicks beat the crap out of San Bernardino chicks but don’t tell my wife 🙂

My website tracking Temecula and South Riverside County

[JES]

When we purchased in early 2004 we looked all over Temecula and even had some $$ down at a place up there. To echo the comments on here, I really liked the areas in the city itself, and especially to the south near 79. Better commute to San Diego, and far away from the northern traffic. We also lived there in an apt. off of Margarita 5 years ago and liked it quite a bit, but it sure was hot in the summer!

In 2004 we ended up buying in San Marcos because prices were not that much higher. 495k for 3000sqft. home in San Marcos vs. 450k for the same one with same yard in Temecula. Beofre buying up there I would seriously look at some areas of San Marcos again. Santa Fe Hills in San Marcos is one area where prices might still be comparable to some areas of Temecula. Even my old neighborhood of Silvercrest in San Marcos a 2700 sqft. home sold for the mid to high 500s this year. IMO Temecula gets buyers with $$ and good jobs from the OC and LA, wheras San Marcos does not, and that may explain the pricing.

[mydogsarelazy]

South Temecula near Hwy 79 has many nice features — I lived there in 2003-4, but many problems too. The traffic at the 79 ramp is tremendous now and you have to ask yourself whether the Pechanga Casino is a plus or not. The drunk driving inspections conducted along Pechanga Parkway on weekend nights slowed traffic quite a bit and made me wonder about the condition of the drivers.

The new Wolf Creek development has some nice homes, but the buyers have paid a premium price, so I would look for repos and sliding values there too.

My idea of a good place to live would be Santa Monica circa the early 1960s. Is there really anyplace in Southern California where the traffic is light, the air clean and the neighbors wholesome? I wouldn’t nominate Malibu (sorry Mel Gibson!)

JS

[JES]

Sadly, I have determined that the answer is generally no! I really like the Encinitas neighborhood where we rent right now, and most of the neighbors are nice, middle class folks who purchased before the boom. 900k is a bit much for a home here though and we are considering relocating out of state.

[PerryChase]

JES, what state would you go to? I’m wondering what you think is a good quality of life and what housing should cost (not just for you but for everyone else around you).

[JES]

Ah, you have hit it right on the head! That is the million $$ question that we are trying to answer right now. We have been researching cities the past few months and are having a hard time narrowing our search. I’ve checked out Idaho, Montana, Colorado and the areas of the Midwest like Illinois, Wisconsin and Iowa.

I do believe that we will end up sacrificing on some quality of life issues if we leave as it is nearly impossible to find a place as perfect as Encinitas! IMO the economy, weather, low crime rate, abundance of things to do like going to the beach, biking year round etc. do justify a much higher cost of living here. I don’t, however, believe that current home prices properly reflect that differential because they have been largely inflated by speculators and investors and not by market forces.

I wouldn’t be surprised to see prices here drop 25% or more, but still settle at a point that is significantly higher than most other cities.

[sdrealtor]

JES
Hang in there! You can get a decent 4BR/2.5BA home in a nice part of Encinitas for about 700K right now. Soon it will be less.

[JES]

Yes, I forgot to mention that we are also considering waiting this out:)

[Author]

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