Temecula’s falling knife :)

[temeculaguy]

Actually I have some familiarity with these, they will end up being priced around 200k when this shakes out, that was their pre-bubble price when they sold new (160 or 180 to 220, from memory). These are true townhouses, attached 2 car garages and the A and B units share very little wall space, mostly the garage walls. There isn’t much condo stock in the zip code, it’s probably less than 10% so the market shouldn’t beat these any more than the sfr market by %. People that bought resales in the mid to high 300’s are just screwed, but the rent is about 1500, give or take, so the 150x rent is 225k. The zip code contains california’s largest casino which has thousands of “rental demographic” jobs yet there are almost no apartments other than the new ones on 79S where rents are 1400-1800 for a dinky, stair climbing, carport, true apartment complex, so these are a somewhat safe sub 225k investment.

What will drive these down to the the low 200’s is the new D.R. horton condos at temecula lane in the 200’s and the unattached, condoesque, shared driveway or alley homes in Wolf Creek that are approaching the sub 300’s and are much nicer.

I don’t know what the suprise is, most of the market is on it’s way back to 2002 or 2003 prices, representing a 50% decline and fundamentally there is nothing that will stop it. In fact $100 a barrel oil will accelerate it for outlying suburbs or exurbs.

[bsrsharma]

patientlywaiting:

These are two independent decisions. I agree prices will come down significantly. My comment on the other thread was recoginizing that loan as a very good loan. No principal payment for 10 years, 6.1% APR FIXED for 40 years, no PMI -is basically free money. I hope he uses that money to buy a home that has already fallen enough to make it worth buying. Many good Temecula homes are now going for $100-$150 per SQFT. Combine that price and a really cheap very long term Fixed mortgage without PMI/HOA/Mello-Roos burden is a guaranteed winning combination. 40 years from now, in 2047, the boomer entitlement tsunami would have passed. $ would be worth less than todays dime – more like a nickel – in purchasing power. For him to payback loan with that funny money will be trivial. His grandkids will be getting more for allowance!

[bsrsharma]

patientlywaiting:

These are two independent decisions. I agree prices will come down significantly. My comment on the other thread was recoginizing that loan as a very good loan. No principal payment for 10 years, 6.1% APR FIXED for 40 years, no PMI -is basically free money. I hope he uses that money to buy a home that has already fallen enough to make it worth buying. Many good Temecula homes are now going for $100-$150 per SQFT. Combine that price and a really cheap very long term Fixed mortgage without PMI/HOA/Mello-Roos burden is a guaranteed winning combination. 40 years from now, in 2047, the boomer entitlement tsunami would have passed. $ would be worth less than todays dime – more like a nickel – in purchasing power. For him to payback loan with that funny money will be trivial. His grandkids will be getting more for allowance!

[bsrsharma]

patientlywaiting:

These are two independent decisions. I agree prices will come down significantly. My comment on the other thread was recoginizing that loan as a very good loan. No principal payment for 10 years, 6.1% APR FIXED for 40 years, no PMI -is basically free money. I hope he uses that money to buy a home that has already fallen enough to make it worth buying. Many good Temecula homes are now going for $100-$150 per SQFT. Combine that price and a really cheap very long term Fixed mortgage without PMI/HOA/Mello-Roos burden is a guaranteed winning combination. 40 years from now, in 2047, the boomer entitlement tsunami would have passed. $ would be worth less than todays dime – more like a nickel – in purchasing power. For him to payback loan with that funny money will be trivial. His grandkids will be getting more for allowance!

[bsrsharma]

patientlywaiting:

These are two independent decisions. I agree prices will come down significantly. My comment on the other thread was recoginizing that loan as a very good loan. No principal payment for 10 years, 6.1% APR FIXED for 40 years, no PMI -is basically free money. I hope he uses that money to buy a home that has already fallen enough to make it worth buying. Many good Temecula homes are now going for $100-$150 per SQFT. Combine that price and a really cheap very long term Fixed mortgage without PMI/HOA/Mello-Roos burden is a guaranteed winning combination. 40 years from now, in 2047, the boomer entitlement tsunami would have passed. $ would be worth less than todays dime – more like a nickel – in purchasing power. For him to payback loan with that funny money will be trivial. His grandkids will be getting more for allowance!

[temeculaguy]

I may have spoken too soon, new listing today, bank repo for a plan C listed at 221K, It does say 2 bedroom, I thought all the plan C’s were 3 bedrooms so there must be a den or something. The 2003 price was 250K so we are sub 2003 and approaching it’s original 2002 price which was probably close to 200k

http://www.redfin.com/stingray/do/printable-listing?listing-id=1262578

It is starting to look inviting based on the rent multiplier, They will probably take 200k and in 6 months if it hits 150k the rent multiplier would be 100x. That is the absolute floor IMHO, so today’s buyer of this at 200k is fairly safe, I don’t see this one lasting very long, it is truly 20-30% below the other that are languishing.

[temeculaguy]

I may have spoken too soon, new listing today, bank repo for a plan C listed at 221K, It does say 2 bedroom, I thought all the plan C’s were 3 bedrooms so there must be a den or something. The 2003 price was 250K so we are sub 2003 and approaching it’s original 2002 price which was probably close to 200k

http://www.redfin.com/stingray/do/printable-listing?listing-id=1262578

It is starting to look inviting based on the rent multiplier, They will probably take 200k and in 6 months if it hits 150k the rent multiplier would be 100x. That is the absolute floor IMHO, so today’s buyer of this at 200k is fairly safe, I don’t see this one lasting very long, it is truly 20-30% below the other that are languishing.

[temeculaguy]

I may have spoken too soon, new listing today, bank repo for a plan C listed at 221K, It does say 2 bedroom, I thought all the plan C’s were 3 bedrooms so there must be a den or something. The 2003 price was 250K so we are sub 2003 and approaching it’s original 2002 price which was probably close to 200k

http://www.redfin.com/stingray/do/printable-listing?listing-id=1262578

It is starting to look inviting based on the rent multiplier, They will probably take 200k and in 6 months if it hits 150k the rent multiplier would be 100x. That is the absolute floor IMHO, so today’s buyer of this at 200k is fairly safe, I don’t see this one lasting very long, it is truly 20-30% below the other that are languishing.

[temeculaguy]

I may have spoken too soon, new listing today, bank repo for a plan C listed at 221K, It does say 2 bedroom, I thought all the plan C’s were 3 bedrooms so there must be a den or something. The 2003 price was 250K so we are sub 2003 and approaching it’s original 2002 price which was probably close to 200k

http://www.redfin.com/stingray/do/printable-listing?listing-id=1262578

It is starting to look inviting based on the rent multiplier, They will probably take 200k and in 6 months if it hits 150k the rent multiplier would be 100x. That is the absolute floor IMHO, so today’s buyer of this at 200k is fairly safe, I don’t see this one lasting very long, it is truly 20-30% below the other that are languishing.

[temeculaguy]

This link may not last because the listing expired and repo’d but this has more pictures and info of the same unit from above, they tried to sell for 289k and failed, now the bank is going for 221k but they paid 349k in 2005 and it’s original 2002 price was 190k.

http://www.redfin.com/stingray/do/printable-listing?listing-id=1210172

[temeculaguy]

This link may not last because the listing expired and repo’d but this has more pictures and info of the same unit from above, they tried to sell for 289k and failed, now the bank is going for 221k but they paid 349k in 2005 and it’s original 2002 price was 190k.

http://www.redfin.com/stingray/do/printable-listing?listing-id=1210172

[temeculaguy]

This link may not last because the listing expired and repo’d but this has more pictures and info of the same unit from above, they tried to sell for 289k and failed, now the bank is going for 221k but they paid 349k in 2005 and it’s original 2002 price was 190k.

http://www.redfin.com/stingray/do/printable-listing?listing-id=1210172

[temeculaguy]

This link may not last because the listing expired and repo’d but this has more pictures and info of the same unit from above, they tried to sell for 289k and failed, now the bank is going for 221k but they paid 349k in 2005 and it’s original 2002 price was 190k.

http://www.redfin.com/stingray/do/printable-listing?listing-id=1210172

[hipmatt]

Temecula is a disaster and has a LONG way to fall. Inventory is insane, and sellers still have little clue that their home isn’t worth close to what they thought. The next 6 months will be foreclosure mania.

Anyone buying right now thinking this is the bottom, or that you are getting a great deal, more power to you.

[hipmatt]

Temecula is a disaster and has a LONG way to fall. Inventory is insane, and sellers still have little clue that their home isn’t worth close to what they thought. The next 6 months will be foreclosure mania.

Anyone buying right now thinking this is the bottom, or that you are getting a great deal, more power to you.

[Author]

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