Temecula update

[23109VC]

I’ve been a lurker/poster for a while, over a year or so. I bought in the Harveston subdivision a few months back. many of you told me not to. some said to do it. i did a lengthy analysis…of both the $$ end of it and other factors – and we bought. at the time, it was 100k below comps.

just wanted to drop in say hi, and update on what i’ve observed since i’ve last posted. i’ve lived in temecula 1.5 years or so. rented for a year, then bought the house.

one house on my street – nice house by the way, which sold in the low 500s, is now on the market for $440k. it had been listed as high as 560k i think. it is bank owned. has been vacant for 4-6 months. new realtor has listed it and the price just went down al ot..from the 500s to 440k. like a 100k whack off the top.

another neighbor who’s livlihood is tied to the housing business is not working and will likely lose their job. they are looking to try and sell their house. i have no idea what they put down on it or what their actual loan balance is but they commented to me that they paid about 500k for the house (also a very nice highly upgraded home) and a realtor told them to expect no more than $400-425 on a sale. mega loss. i think they have an ARM…so they are in trouble. i would not be suprised to see that one go bank owned.

i have seen some of the local new housing developments that were listing in the low 400s now listing in the high 300s. Spencer’s Crossing, in Murrieta, near the Murrieta/Winchester border off of Winchester road has some really nic elooking model homes, and prices have been plumettin there.

i heard from a neighbor that some of the really $$ stuff in south temecula that was pushing 700-800k is now in the 4-500k range. haven’t confirmed it, but it seems the higher end stuff is taking a harder hit, at least at this point.

condos in my area were selling in the high 300s, are now in the 200s. i know one condo owner who has an ARM, no equity, and can’t refi, and new ones are selling for 50-75k less than they paid. sucks to be them.

if this keeps up you will be able to buya Mcmansion in Temecula, and I mean a nice part of temecula, and a BIG 3000+ sq ft home with ALL the bells and whistles for 300k. easily. the house that WAS 750k will be 300-350k.

should it continue to go down, which it will, my killer deal will just be average, or i may even wind up slightly upside down. if I were to only go slightly upside down, i won’t really care. i like where i’m at and will happily stay put and ride it out. if *I* wind up mega upside down, i will wish i listened to some of you. 🙂 we will see.

I was suprised to see rents have gone UP in my area. one house that i had seen renting a year ago for 1600ish is now renting for 1800-1900. i have seen 2200-2300sq ft homes in Harveston go as high as 23200-2400/month. are rents going up b/c there are more renters due to people losing their houses? but if there are more renters, wouldnt’ there also be more rental properties b/c the houses that were “owned” are now rentals?

i know one coworker who could not sell a houes after a divorce, and has rented it out, but at a loss. b/c they can’t rent it for enough to cover expenses. probably quite common in the current market.

I’m still around. still watching.

hey, if prices fall badly enough, i’ll buy ANOTHER House and rent out the one i’m in now. 🙂

if it gets cheap enough, id be able to afford it. 🙂 ha ha

[snail]

Correct me if I am wrong, but I believe you pay about/close to $100/sq.ft. for your house?! My opinion is prices will not go much lower than that (OPINION was not back by any data!). My personal dislike about Harveston and the Spencer Crossing developments are the high tax rate (1.9%) which just going to kill my budget, however Harveston is actually really convenient location and pleasant and if you have kids it should be great (Spencer is just to remote for my taste).
Regarding the Rent in Temecula, I sure don’t see any pricing going up. Its probably just people trying to minimize their monthly losses.
Well don’t worry about the bear here, enjoy your home. A house is a home not an investment anyway…..

[snail]

Correct me if I am wrong, but I believe you pay about/close to $100/sq.ft. for your house?! My opinion is prices will not go much lower than that (OPINION was not back by any data!). My personal dislike about Harveston and the Spencer Crossing developments are the high tax rate (1.9%) which just going to kill my budget, however Harveston is actually really convenient location and pleasant and if you have kids it should be great (Spencer is just to remote for my taste).
Regarding the Rent in Temecula, I sure don’t see any pricing going up. Its probably just people trying to minimize their monthly losses.
Well don’t worry about the bear here, enjoy your home. A house is a home not an investment anyway…..

[gn]

23109VC,

Kudos to you for having the courage to look at things the way they are. Many folks who have bought are in total denial about the current state of the market.

hey, if prices fall badly enough, i'll buy ANOTHER House and rent out the one i'm in now. 🙂 

If you can afford the negative cashflow from renting out your current house, that's not a bad strategy. 

I was suprised to see rents have gone UP in my area

The main reason that rents have gone up is because of the supply reduction. Many investors who previously rented out their houses have given up & let the lenders foreclose. These houses are currently vacant but are not available for rent. At some point in the future, the lenders  will dump these houses a fire-sale prices & investors will scoop them up & rent them out. Then, rent will come down. Basically, rents have gone up because of an artificial reduction in the rental supply.

Of course, people who lost their primary residences to foreclosure also contribute to the rental shortage. But this is a minor factor.

[gn]

23109VC,

Kudos to you for having the courage to look at things the way they are. Many folks who have bought are in total denial about the current state of the market.

hey, if prices fall badly enough, i'll buy ANOTHER House and rent out the one i'm in now. 🙂 

If you can afford the negative cashflow from renting out your current house, that's not a bad strategy. 

I was suprised to see rents have gone UP in my area

The main reason that rents have gone up is because of the supply reduction. Many investors who previously rented out their houses have given up & let the lenders foreclose. These houses are currently vacant but are not available for rent. At some point in the future, the lenders  will dump these houses a fire-sale prices & investors will scoop them up & rent them out. Then, rent will come down. Basically, rents have gone up because of an artificial reduction in the rental supply.

Of course, people who lost their primary residences to foreclosure also contribute to the rental shortage. But this is a minor factor.

[patientlywaiting]

23109VC, I can’t believe you’ve been reading this site and still you went out and bought a few months back.

Anyway, do keep us to date on Temecula. Yes, kudos to you for being realistic even though you purchased recently.

[patientlywaiting]

23109VC, I can’t believe you’ve been reading this site and still you went out and bought a few months back.

Anyway, do keep us to date on Temecula. Yes, kudos to you for being realistic even though you purchased recently.

[snail]

$100/sq.ft. for your house?! My opinion is prices will not go much lower than that

I was wrong…so…wrong…sic
http://housing-kaboom.blogspot.com/2007/10/broken-100-sqft-barrier.html

[snail]

$100/sq.ft. for your house?! My opinion is prices will not go much lower than that

I was wrong…so…wrong…sic
http://housing-kaboom.blogspot.com/2007/10/broken-100-sqft-barrier.html

[bsrsharma]

Snail: Your link doesn’t have any Temecula homes; Right? I think the OP bought a Temecula home for $100/sqft. That is a good deal. When at least 25% of SD county homes reach $100 mark, I think you can call bottom.

[bsrsharma]

Snail: Your link doesn’t have any Temecula homes; Right? I think the OP bought a Temecula home for $100/sqft. That is a good deal. When at least 25% of SD county homes reach $100 mark, I think you can call bottom.

[23109VC]

i did NOT buy for $100/sq ft. 🙂 I wish.

I still got a good deal. I paid a good $100k less than ANYONE on my street. The seller bought at peak pricing, and ate the loss. He was a $$$$ investor dumping a lot of property, and wanted out, fast.

the cheapest house I have seen in my immediate neighborhood that is for sale is still priced 50k more than I paid.

there are amazing deals out here, but like another person pointed out, Spencer’s Crossing and stuff in that area, is a bit more remote and less convenient. for people with kids, Harveston is an ideal setting. parks, lake, pool facility, easy access to freeway, mall, and of course COSTCO!. plus it’s 5 min from my office. going home for lunch is hard to beat.

i bet things will still slide down. i’m just not so sure how far.

ultimately, these houses are worth what they will rent out for. so while prices may come down, i don’t see prices falling so low that you could buy one for less than you could rent if for…. someone correct me if i’m wrong…but if you can figure out roughly what a hosue SHOULD rent for, can’t you ultimately determine the bottom line range of what it could sell for – assuming it went to investors who would rent it out?

assume a hous would rent for 1800-2000 – what’s it’s “value”…..wasn’t there a formula that houses are worth 200x the rent or something…

[23109VC]

i did NOT buy for $100/sq ft. 🙂 I wish.

I still got a good deal. I paid a good $100k less than ANYONE on my street. The seller bought at peak pricing, and ate the loss. He was a $$$$ investor dumping a lot of property, and wanted out, fast.

the cheapest house I have seen in my immediate neighborhood that is for sale is still priced 50k more than I paid.

there are amazing deals out here, but like another person pointed out, Spencer’s Crossing and stuff in that area, is a bit more remote and less convenient. for people with kids, Harveston is an ideal setting. parks, lake, pool facility, easy access to freeway, mall, and of course COSTCO!. plus it’s 5 min from my office. going home for lunch is hard to beat.

i bet things will still slide down. i’m just not so sure how far.

ultimately, these houses are worth what they will rent out for. so while prices may come down, i don’t see prices falling so low that you could buy one for less than you could rent if for…. someone correct me if i’m wrong…but if you can figure out roughly what a hosue SHOULD rent for, can’t you ultimately determine the bottom line range of what it could sell for – assuming it went to investors who would rent it out?

assume a hous would rent for 1800-2000 – what’s it’s “value”…..wasn’t there a formula that houses are worth 200x the rent or something…

[patientlywaiting]

So you were the comp killer what cause that whole slide, ha.haha.

Within $50k from the next best deal… Well, I’m afraid that your great deal will turn out to be mediocre at best It’s all relative anyway so if you’re happy, then that’s all that counts.

Did you add up all the ownership premium over time? And what those would be worth if you had wisely invested the money?

You sound like a realist who can see the market for what it is. Why not keep track of the difference been buy and rent since your purchase and after 10 years see what the difference is. It would be a good lesson to hand down to the kids.

[patientlywaiting]

So you were the comp killer what cause that whole slide, ha.haha.

Within $50k from the next best deal… Well, I’m afraid that your great deal will turn out to be mediocre at best It’s all relative anyway so if you’re happy, then that’s all that counts.

Did you add up all the ownership premium over time? And what those would be worth if you had wisely invested the money?

You sound like a realist who can see the market for what it is. Why not keep track of the difference been buy and rent since your purchase and after 10 years see what the difference is. It would be a good lesson to hand down to the kids.

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