Price Drop Predicted for Inland Empire

[startingout]

This article was printed in the Press-Enterprise today. I know it’s not about San Diego, but it is interesing nonetheless.

Funny how a national economy firm is predicting a 10% drop, but local economists say a drop in prices is unlikely.

I personally feel that the Inland Empire is in for more than a 10% drop. Affordability is veeery low, you can’t buy a decent home at median price (unless you like living in the ghetto), wages in that area aren’t improving in any major way, and the prices are so inflated (considering the home you get, and where the home is). How does paying $400K for a run down house in a bad area sound? Not great. I can’t see how the Inland Empire housing market will stop at a 10% drop.

What does everyone else think?

[mydogsarelazy]

Hi startingout,

No doubt about it, the Inland Empire will drop more than 10%.

I live in an area of new, larger homes in Murrieta, and none of the 8-10 homes with for sale signs up have sold in the past 6 months, and nearly all have “price reduced” signs. One home that I have kept an eye on started at $725k a month ago and is already down to $625k. Never mind that the first price was a speculator’s “let’s see if I can nail some fool” price…

Another house across the street was first listed at $535k and is now at $515.
When I dropped by the open house last weekend someone had written “Call me if you will take $400k” on the interest list.

JS

[Chrispy]

Off topic, but speaking of interest lists and so on, I saw a hand-written sign (the kind with a stake, stuck in the ground at a busy intersection) in PB last weekend which said, “Now is the time to buy” with some agent’s phone number.

Someone had scratched out the word “now” and written “later.”

[PerryChase]

Back in 1989 the local press said that California was immune from a downturn, until it hit us hard. It’ll happen again.

ah, how things change but remain the same!

[Bugs]

I’ve been experiencing deja vu so often lately that I had to check my closet for acid washed jeans and top siders. Next thing you know mullets and shoulderpads will be back in.

[speedingpullet]

…no, but ballet shoes, ra-ra skirts, assymetric shoulder lines and studded belts are all back.
Can I ever forgive the 80’s for such heinous crimes against fashion…?

[FormerOwner]

I’ve lived in Temecula for 6 years. I’m expecting the price drop in the IE to be on the order of 50-60% in real dollars (adjusted for inflation). Moving out here only makes sense if it’s cheap and commuting costs/times are reasonable. None of those things is true about the IE anymore. Cheap prices will have to come back since that’s the only way anyone with any sense would buy out here. Since 2000, housing prices have more than doubled and mello roos have gone through the roof while traffic has become almost ridiculous and gas prices have doubled. Considering the worsening traffic and gas prices, I think houses in the IE are actually worth less now than they were in 2000 – that would be a 50-60% drop. At that level, I would *consider* buying here again.

[hipmatt]

I’ve lived in Temecula for 16 years, went to High School here. I’ve seen homes QUADRUPLE in price since 1996. Not all homes, but many like paloma del sol, were around and under the $100k in 96, and the same ones have sold for over $425k. Sadly, home buyers here STILL expect these kind of gains like it is their God given right. IMHO the bubble here is amongst the worst in the nation. Sold my home last year and now I rent, but there are still some tools out here who think their castle is worth $700k or more.
The more people continue to live like they currently do, the more they will run this place into the ground. Traffic is horrible and getting worse, gas is down a bit now but still relatively high and will go back up soon. All the people here that actually make decent $$ usually commute at least an hour each way to SD, LA, OC or maybe Riverside. These guys arent all that smart, everyone drives huge trucks and suvs, usually alone, despite the horrid fuel economy. People here are up to their ears in debt as “keeping up with the Jones’s”is priority one for these yuppies.
You would think that ridiculous home prices alone would keep people away from making bad decisions about their house, but the taxes are another story. Take a 3000sqft $700k home on a 6200sqft lot in Harveston. The taxes are 1.9% per year. Thats over $13k a year. If the home was paid off, you still would have to budget over $1100 per month just for property taxes. Throw in the $130 hoa, and fire insurance, and you are at about $1400 a month to live in your paid off home. This makes absolutely no sense to me and can no way represent the amount of money it takes to own a home. Imagine buying this home traditionally with 20% down and a 30 year fixed loan. It would be $140k down, a mortgage of about $560k. P and I would be $3285 add taxes and ins. about $4600 total per month not including utilities. And how many people can honestly afford this in the Temecula Valley?

[waiting hawk]

PE read my site? lol this is been in the making a while. BUT everyone wants to live here. The beaches, views, and movie stars. ummm never mind.

My website tracking Inland Empire

[Author]

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