Temecula/Murrieta – Same Bubble?

[Bugs]

It’s my understanding that Temecula is a planned community and was planned by the same company that planned Irvine. Temeku/Murietta has a sizable portion of of area devoted to industrial and business park uses, which is where a lot of economic activity occurs. It is a much more mature area now than it was during the last cycle.

With all that said, though, I would recommend some caution in terms of judging its current degree of economic independence. If you drive through the business park areas one thing you’ll notice very quickly is how dependent most of those businesses are on the fortunes of the real estate industry. The most common business type in all those industrial areas are businesses either directly or indirectly related to development and real estate. There are the home furnishings, flooring, landscaping, mortgage and other RE operations. The second most common businesses are related to discretionary income, such as the motorsports and other lifestyle businesses. Many of these businesses rely on discretionary income that will decline as the current RE cycle unwinds, and are doomed to fail.

I think the area will still end up being dependent on some commuting before this is all over. I think the prices will suffer in proportion to its outlying location relative to the more diverse employment centers. In other words, if San Diego ultimately bites the 40% bullet, this area will probably be in excess of that.

[PerryChase]

I think that the best way to watch a market it to do what Reators do. Review every single listing in your town/neighborhood. It’s very easy to do on ziprealty.com. Then drive around to those listing on your way to work and back home, or while running errands.

As new listings pop up, it only takes a little bit of time to review them.

[aztecnology]

The bubble in the valley is just now getting really bubbilicious.

Go to foreclosure.com do a search on 92562, and select foreclosure and preforeclosure and complete the search.

462 properties.

Sort by street name, go to page 2

Look for Belcara Pl, you will find 8 houses in a state of foreclosure.

This particular culdesac has 11 houses.

8 out of 11 in foreclouse….

This is in the copper canyon area, near where calle del oso oro meets clinton keith.

Most of these houses sold in the fall of ’05 in the mid $600’s. The banks have started pricing at $575k.

[temeculaguy]

Thanks Aztec, yes there are quite a few repos/nods in 92562 but I think about a hundred were part of that R.E. scam that was in the papers and on this site a few months back, most of their holding were in 92562, my problem is I already know where I want to live. I hope a lot of the jobs are subject to failure in the R.E. industry as Bugs pointed out but I just checked some stats on yahoo neighborhoods

http://realestate.yahoo.com/Neighborhoods

and found that 92592 had 75k median household and 83% home ownership. 92591 (north temec) and 92562 (murrieta) drop 8-10k in income (as you go further north it gets worse). I checked some north county inland areas (Vista, San Marcos, Esco) and found the income was in the 40’s and 50’s and the ownership in the 50% range. Poway was almost a dead heat with Temecula and carlsbad 92009 was only 8k higher in income with the same ownersip rates. These people are getting their money from somewhere and 75k median doesn’t come from jobs at the mall. Poway and Carlsbad houses are about double the price of Temecula yet the average Temeculan makes the same or almost the same money, if those areas dropped 50% they would be as affordable as Temecula is today, that’s what scares me as I wait for the bust.

92592 stats are skewed and that’s my hope against the argument above because there is not one single apartment building in the entire zip code, how’s that for planning. 56k residents of the zip 92592 and no apartments, six elementary schools, two middle schools and one high school without a single apartment dweller student. The schools in 92592 consistently take the top spot in Riv/San Bernadino, not in the top but “the” top spot. My point is, the bubble will hurt all areas but the most desirable area (not just a small enclave of nice) should do better, that’s why I’m staying in 92592 despite the deals I can get in nearby areas.

As far as infrastructure goes, only traffic is a lacking, with more than 1 officer per thousand residents they have more cops per capita than any s.d. town with the exception of carlsbad where they have 107 sworn to 92k residents, almost exactly what temecula has (currently 1 for every 943). The new hospital on 79 south will be over 200 beds, more than the other two existing hospitals combined and two new fire stations are nearing completion, it seems to me infrastructure is catching up. I am absolutely certain where I want to live within a two mile radius, the only question is when to strike.

[aztecnology]

Same here, I’ve got my eyes on a couple neighborhoods that I could settle into. I’ve been in out of the valley a few times. Family moved to Murrieta in 1989 and we moved out to Huntington Beach in 1994. Those were some pretty lean years out here, people couldn’t give houses away, developments sat empty with graded pads where I use to ride my bike or take shortcuts through the neighborhoods by jumping the fences of the vacant houses. Moved back briefly in 1996 and I wish I would have stayed, I was 18 and just married, and the wife and I looked at some houses in Alta Murrieta behind the fireman’s park/ fire station – we could have got a house for about $88k at the time – $700/month or so with taxes, at the time the cal oaks & los al apartments were renting for about $550/month – shoulda coulda woulda. Finally moved back again in ’04 where I had graduated college and had a good job, but could only afford my current condo. So now I wait as we’re busting at the seems to make our move in 1-2 years for the bigger house with the backyard/pool…

[temeculaguy]

Aztec, you are bright young guy with a good plan, it will work for you and I am proud of you for buying what you could afford, very few in your age bracket can see that. By your name I’m gonna guess you went to SDSU, so did I and one of my fraternity brothers bought in Alta Murrieta before firemans park was there about a month after graduation. I visited him and that is what brought me to the area. You are right, I think his mortgage was well under a grand, mine was. I moved a few months later and my mortgage was less than my rent for an apartment in cardiff. It’s amazing that a single guy right out of college 18 years ago who had barely started his career could buy a house that you can’t today, that will change, it almost has to because you are the future market.

[sdrealtor]

I do not agree that it has to change to the extent that a guy right out of college could buy a house right out of college. 18 years ago, Aztec and you had the good fortune of buying in the “path of progress” where there was no infrastructure in place a the time. You took a big risk and it turned out well. You we wre rewarded for doing so. Temecula is a very different place today than it was 18 years ago. Expect lower prices and greater affordability ahead but not that much.

[Author]

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