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carlislematthew.
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July 17, 2006 at 3:08 PM #6902July 17, 2006 at 4:01 PM #28617
no_such_reality
ParticipantI think my bigger concern is that the housing market will become very illiquid.
People won’t be able to be sell their homes because they can’t stomach walking away with the debt. At the same time, due to the low interest rates, home owners will be stuck in homes they can make the payments on, but with lifestyles they can no longer afford to maintain.
I remember the early 90s, just as the market bottomed and how dilapidated many neighborhoods were.
July 17, 2006 at 4:08 PM #28618Bugs
ParticipantYou can argue that it’s worth the stretch when the market’s on it’s way up because there’s some profit to be made. To the extent that people become aware that the market is levelling off and declining in some areas that stretch no longer makes sense.
July 17, 2006 at 4:28 PM #28619bob007
Participantthe big picture is that coastal California will lose tech jobs because young techies cannot afford any decent homes especially if prices stay high. That will have a devastating negative long term impact on California’s economy.
July 17, 2006 at 5:35 PM #28624waiting hawk
Participantmydogsarelazy,
This site is right in ur neck of the woodsJuly 17, 2006 at 5:50 PM #28625SD Realtor
Participantwaiting hawk I checked out that site. Crazy!!! Very cool stuff.
I do agree with this thread that there is no reason to buy right now. Find a nice place, rent it, invest your cash in a wise manner, and hopefully in a couple of years (or maybe sooner?) you can buy the home you really want.
July 17, 2006 at 6:09 PM #28626ParticipantI was in PC Club buying new mother board and stuff. We were talking about how the prices for LCD screens and DVD burners are now SO cheap. He said “way too much competition”, I said “ya like housing is now”, and He said “you’re a sucker to buy right now”. Damn even the guy behind the counter at PC Club knows better. Good grief Charlie Brown. Thanks for the comment on my site SD. It’s all doom and gloom but it’s true.
Nobody threw me a LOL when I posted this though 🙁
July 17, 2006 at 6:32 PM #28629mydogsarelazy
ParticipantHi Waiting Hawk,
That site is just great. It really shows you how the situation is beginning to develop and it won’t be long until recent buyers of homes find themselves dramatically upside down.
JS
July 17, 2006 at 7:15 PM #28630Tone
ParticipantVery interesting waiting hawk.
My parents had retired about 10 years ago to Sun City (out Murietta way) and that place has boomed during that time. Housing developments are everywhere where once was open pasture. My folks have been trying to get me to move out that way (I live in Long Beach/Orange county) and have a large, new, affordable house, but I’ve always balked. I can’t stand the climate and there didn’t seem to be any industry out there. I suspeceted that most people commute to LA and SD and it made me wary.
On the subject of industry in the inland empire, I read in the LA Times about a year ago that Murietta/Temecula was going to be the new Orange County. The logic was that OC started off as a bedroom community to Los Angeles. Industry moved to OC once the population was in place to support it. Hence the article proposed that the same thing would happen with Riverside once the land was developed with housing — industry would follow.
This could happen, but I suspect more that the housing boom in Riverside is more of an overflow of those who can’t afford a house near the coast and are willing to brave an arduous commute. Once the LA and SD markets slow, Riverside will take a big hit. I have no data — just thinking.
July 17, 2006 at 7:39 PM #28631ParticipantYa I hear ya Tone,
There is no way (in my view) that South Riverside county can ever be in the same realm as OC, but never know. If OC falls into the ocean and they gain ocean front properties that will do it 🙂 That area is still building at an alarming rate and will over build like Inland Empire did in 1990’s.July 17, 2006 at 9:19 PM #28632FormerOwner
ParticipantI agree; Southwest Riverside County (Temecula, Murrieta, Lake Elsinore, Menifee, Sun City, Winchester, etc.) is in a HUGE bubble. Even though the homes are cheaper than SD, OC, or LA counties you’ll burn up all of that savings and more in commuting costs (not to mention wasting 2-4 hours per day of your life sitting in traffic). Here are the reasons I think this area is EVEN MORE overpriced than SD, Orange, or LA counties now:
1) With $3-4/gallon gas and wear and tear/depreciation on your car, the commute just isn’t worth it.
2) Not only is the commute expensive but it’s a massive waste of TIME. If you take your hourly salary and multiply it by the numbers of hours you’d spend behind the wheel and at tire and car repair shops waiting for maintenance to be done on the car your driving 30,000+ miles per year, you’ll see that it’s like working a part-time job as a cab driver and not getting paid for it.
3) Not only is the commute bad but the local traffic is horrible also due to horrible urban planning in the area. The traffic lights are not synchronized and are not sensored. You’ll find yourself in a line of cars waiting at a red light trying to get to the mall when no one’s coming the other way! DUMB! Plus, everyone DRIVES their kids to school in the SUV’s they bought with their home equity loans.
4) There is really no public transportation to speak of save for a few bus routes that really aren’t practical to use at all. The area was totally built for cars ONLY.
5) It’s HOT here. You’ll spend several hundred dollars a month in air conditioning bills during the summer – and’ that’s if no one’s home during the day. Plus it gets cold in the winter compared to the coastal areas – higher heating bills.
6) There is really NO local economy outside of housing/real estate/construction/mortgage loans and CARS. All declining industries at the moment.
7) Sure the costal counties cost more but when their prices drop, Inland Empire prices will drop even more.
8) There is not much culture locally, altough it’s improving in Temecula.
9) There are no good colleges or universities in the area – a pre-requisite for attracting innovative high-tech companies.
10) The area sits in between two international airports but 60 miles away from each. There is no good way to get to the area – you are forced to sit in traffic.
11) The mello roos cause the annual property taxes for most homes to be extremely high – 1.8% – 2%. In a lot of cases, your tax bill would be LOWER in SD or OC, I think.
12) There has been MASSIVE overbuilding during the last 5 years, fueled by speculators. There are many vacant homes for sale or for lease – with no takers!
13) Many people are living beyond their means in this area and there will be massive foreclosures within the next 1-2 years.In spite of everything I’ve said, I live and this area and still like it BUT I sold my house a few months ago and I’m now renting a house. I’ll have to see how the character of the area changes over the next few years and what happens to housing prices before I can decide whether I’d buy into this area again. Right now, I’ve put my money into CD’s and I don’t plan on buying ANY real estate for at least 5 years or so. I’ll adjust that timeline as I see conditions changing.
Also, there are a lot of really good people in Southwest County and I hope those that are on the edge either sell their houses, get out of bad loans, or both before it’s too late. One of my major concerns is that if housing prices really do fall 50% like I’m thinking they might, what socioeconomic group would move in here. Would it become another Moreno Valley? If that happens, I won’t even be renting here anymore!
July 17, 2006 at 9:31 PM #28640North County Jim
ParticipantTemecula was a poster child for the last housing bust in the early 90’s. There were neighborhoods around the Temecula Creek Inn with partially completed homes that had boarded windows.
Time magazine had a special issue on the end of the California dream in 1991. There was a story on hellish commutes from outlying areas and the terrible quality of life that went with it. If I recall, Temecula got prominent mention.
As an aside, we viewed the cover as a contrary indicator and bought our first house six months later. A couple of years too early I’m afraid. Our timing on selling was much better.
July 17, 2006 at 9:36 PM #28642ParticipantHi Former Owner,
I agree with most of your points, but #9 is not accurate.
Mt. San Jacinto College, which has campuses in San Jacinto and Menifee is a very strong, fast growing community collge. When you drive by Menifee on the 215 you can see the new $12 million dollar library, and a new technology building starts construction next year.
JS
July 17, 2006 at 9:42 PM #28643ParticipantYes, Mt. San Jacinto College is a plus for the area. I’d also like see something like a UC-Temecula.
July 17, 2006 at 9:46 PM #28644ParticipantFunny the subject of Murrieta/Temecula should come up. I just got done appraising an industrial building in Murrieta. What struck me was the amount of industrial development happening on the west side of the freeway and the amount of vacancy. Even more striking is that of the units being rented or purchased, most of those businesses are either related to real estate,furniture and home improvements; or motorsports. Both of those segments of our economy are very vulnerable to the effects of the real estate market decline.
Those units will all get rented out eventually and there will be employment out there, but the big question is whether it will be the type of employment that will support homeownership.
And yes, the outlying areas always get hurt worse than the areas closer to employment.
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