[Bob]

Eclipxe says-> “Two homes up my street just sold for >$100 sqft. Similar sq footage as mine. I got in at around $95 psqf.I’ll call a bottom along with TemeculaGuy.”

Eclipxe, your example hardly qualifies as a total representation of the market to make such a bold statement, does it ? For example, I know of two beautiful properties that sold earlier this month, a 4000 sqft. in Vail Ranch that sold for $81 sqft., and another beauty in one of the nicest hoods in Red Hawk for $84 sqft. The comps in Red Hawk sold for $110 in late 2008.

As for your comment regarding government intervention, you are correct that its massive. But the point I’m making is that the most important interventionist policy thus far has been the moratoriums – both by the government and by the banks/Fannie/Freddie. Because of the moratoriums, the supply of new properties hitting the market has been curtailed during the last three months. But those moratoriums are now OVER, at least for now. This isn’t rocket science…as supply once again increases, there will be downward pressure on prices – particulary with the high unemployment numbers . The Feds will try to their hardest to artificially reduce supply, but one way or the other, the market has a way of eventually correcting itself.

And I’ll add one more point – mortgage rates have only one direction to go, and thats up. What type of predictions will you all make next year if rates are at 6% or 7%, while unemployment is projected to be near 11% statewide ? Under that scenario, my estimate is that housing prices will remain flat at best.

I’m not a bull or a bear, but a realist. The economy is nearing the end of the deflationary cycle, thats true. But coming soon is the second part of the equation, which is inflation. With their efforts to reinflate the economy, the Feds are creating future inflation that will be every bit as nasty as the deflationary cycle we’ve experienced for the past year. If inflation gets out of control,(spending trillions has a way of doing that) mortgage rates could skyrocket like they did in the late 70’s. I’m not predicting they will, but I wouldn’t be surprised if mortgage rates are in the 7%-8% range by the end of 2010. Higher rates alone will kill any housing recovery under that scenario when factoring in unemployment numbers.

[Bob]

Eclipxe says-> “Two homes up my street just sold for >$100 sqft. Similar sq footage as mine. I got in at around $95 psqf.I’ll call a bottom along with TemeculaGuy.”

Eclipxe, your example hardly qualifies as a total representation of the market to make such a bold statement, does it ? For example, I know of two beautiful properties that sold earlier this month, a 4000 sqft. in Vail Ranch that sold for $81 sqft., and another beauty in one of the nicest hoods in Red Hawk for $84 sqft. The comps in Red Hawk sold for $110 in late 2008.

As for your comment regarding government intervention, you are correct that its massive. But the point I’m making is that the most important interventionist policy thus far has been the moratoriums – both by the government and by the banks/Fannie/Freddie. Because of the moratoriums, the supply of new properties hitting the market has been curtailed during the last three months. But those moratoriums are now OVER, at least for now. This isn’t rocket science…as supply once again increases, there will be downward pressure on prices – particulary with the high unemployment numbers . The Feds will try to their hardest to artificially reduce supply, but one way or the other, the market has a way of eventually correcting itself.

And I’ll add one more point – mortgage rates have only one direction to go, and thats up. What type of predictions will you all make next year if rates are at 6% or 7%, while unemployment is projected to be near 11% statewide ? Under that scenario, my estimate is that housing prices will remain flat at best.

I’m not a bull or a bear, but a realist. The economy is nearing the end of the deflationary cycle, thats true. But coming soon is the second part of the equation, which is inflation. With their efforts to reinflate the economy, the Feds are creating future inflation that will be every bit as nasty as the deflationary cycle we’ve experienced for the past year. If inflation gets out of control,(spending trillions has a way of doing that) mortgage rates could skyrocket like they did in the late 70’s. I’m not predicting they will, but I wouldn’t be surprised if mortgage rates are in the 7%-8% range by the end of 2010. Higher rates alone will kill any housing recovery under that scenario when factoring in unemployment numbers.

[Bob]

Eclipxe says-> “Two homes up my street just sold for >$100 sqft. Similar sq footage as mine. I got in at around $95 psqf.I’ll call a bottom along with TemeculaGuy.”

Eclipxe, your example hardly qualifies as a total representation of the market to make such a bold statement, does it ? For example, I know of two beautiful properties that sold earlier this month, a 4000 sqft. in Vail Ranch that sold for $81 sqft., and another beauty in one of the nicest hoods in Red Hawk for $84 sqft. The comps in Red Hawk sold for $110 in late 2008.

As for your comment regarding government intervention, you are correct that its massive. But the point I’m making is that the most important interventionist policy thus far has been the moratoriums – both by the government and by the banks/Fannie/Freddie. Because of the moratoriums, the supply of new properties hitting the market has been curtailed during the last three months. But those moratoriums are now OVER, at least for now. This isn’t rocket science…as supply once again increases, there will be downward pressure on prices – particulary with the high unemployment numbers . The Feds will try to their hardest to artificially reduce supply, but one way or the other, the market has a way of eventually correcting itself.

And I’ll add one more point – mortgage rates have only one direction to go, and thats up. What type of predictions will you all make next year if rates are at 6% or 7%, while unemployment is projected to be near 11% statewide ? Under that scenario, my estimate is that housing prices will remain flat at best.

I’m not a bull or a bear, but a realist. The economy is nearing the end of the deflationary cycle, thats true. But coming soon is the second part of the equation, which is inflation. With their efforts to reinflate the economy, the Feds are creating future inflation that will be every bit as nasty as the deflationary cycle we’ve experienced for the past year. If inflation gets out of control,(spending trillions has a way of doing that) mortgage rates could skyrocket like they did in the late 70’s. I’m not predicting they will, but I wouldn’t be surprised if mortgage rates are in the 7%-8% range by the end of 2010. Higher rates alone will kill any housing recovery under that scenario when factoring in unemployment numbers.

[Bob]

Eclipxe says-> “Two homes up my street just sold for >$100 sqft. Similar sq footage as mine. I got in at around $95 psqf.I’ll call a bottom along with TemeculaGuy.”

Eclipxe, your example hardly qualifies as a total representation of the market to make such a bold statement, does it ? For example, I know of two beautiful properties that sold earlier this month, a 4000 sqft. in Vail Ranch that sold for $81 sqft., and another beauty in one of the nicest hoods in Red Hawk for $84 sqft. The comps in Red Hawk sold for $110 in late 2008.

As for your comment regarding government intervention, you are correct that its massive. But the point I’m making is that the most important interventionist policy thus far has been the moratoriums – both by the government and by the banks/Fannie/Freddie. Because of the moratoriums, the supply of new properties hitting the market has been curtailed during the last three months. But those moratoriums are now OVER, at least for now. This isn’t rocket science…as supply once again increases, there will be downward pressure on prices – particulary with the high unemployment numbers . The Feds will try to their hardest to artificially reduce supply, but one way or the other, the market has a way of eventually correcting itself.

And I’ll add one more point – mortgage rates have only one direction to go, and thats up. What type of predictions will you all make next year if rates are at 6% or 7%, while unemployment is projected to be near 11% statewide ? Under that scenario, my estimate is that housing prices will remain flat at best.

I’m not a bull or a bear, but a realist. The economy is nearing the end of the deflationary cycle, thats true. But coming soon is the second part of the equation, which is inflation. With their efforts to reinflate the economy, the Feds are creating future inflation that will be every bit as nasty as the deflationary cycle we’ve experienced for the past year. If inflation gets out of control,(spending trillions has a way of doing that) mortgage rates could skyrocket like they did in the late 70’s. I’m not predicting they will, but I wouldn’t be surprised if mortgage rates are in the 7%-8% range by the end of 2010. Higher rates alone will kill any housing recovery under that scenario when factoring in unemployment numbers.

[Bob]

Eclipxe says-> “Two homes up my street just sold for >$100 sqft. Similar sq footage as mine. I got in at around $95 psqf.I’ll call a bottom along with TemeculaGuy.”

Eclipxe, your example hardly qualifies as a total representation of the market to make such a bold statement, does it ? For example, I know of two beautiful properties that sold earlier this month, a 4000 sqft. in Vail Ranch that sold for $81 sqft., and another beauty in one of the nicest hoods in Red Hawk for $84 sqft. The comps in Red Hawk sold for $110 in late 2008.

As for your comment regarding government intervention, you are correct that its massive. But the point I’m making is that the most important interventionist policy thus far has been the moratoriums – both by the government and by the banks/Fannie/Freddie. Because of the moratoriums, the supply of new properties hitting the market has been curtailed during the last three months. But those moratoriums are now OVER, at least for now. This isn’t rocket science…as supply once again increases, there will be downward pressure on prices – particulary with the high unemployment numbers . The Feds will try to their hardest to artificially reduce supply, but one way or the other, the market has a way of eventually correcting itself.

And I’ll add one more point – mortgage rates have only one direction to go, and thats up. What type of predictions will you all make next year if rates are at 6% or 7%, while unemployment is projected to be near 11% statewide ? Under that scenario, my estimate is that housing prices will remain flat at best.

I’m not a bull or a bear, but a realist. The economy is nearing the end of the deflationary cycle, thats true. But coming soon is the second part of the equation, which is inflation. With their efforts to reinflate the economy, the Feds are creating future inflation that will be every bit as nasty as the deflationary cycle we’ve experienced for the past year. If inflation gets out of control,(spending trillions has a way of doing that) mortgage rates could skyrocket like they did in the late 70’s. I’m not predicting they will, but I wouldn’t be surprised if mortgage rates are in the 7%-8% range by the end of 2010. Higher rates alone will kill any housing recovery under that scenario when factoring in unemployment numbers.

[Bob]

While this debate about RealtyTrac is interesting, its also irrelevant, as we don’t need RealtyTrac to know there are still thousands and thousands of potential foreclosures in the pipeline. Why ? Because the banks, the state of California, and the Federal reserve have said so. The reason they’ve initiated numerous programs into place, including the recent moratoriums, is because they KNOW there are millions of bad loans still out there.

Basically, the feds are throwing all their power into the market in the hopes of reducing a massive deflationary cycle. Whether you or I agree with such federal intervention, the fact is, since last December the combination of loan modifications, moratoriums, and the Feds actions to reduce interest rates have done exactly what they wanted – which was to reduce supply and create an environment where buyers would reenter the market in the short term. But they know that unless the majority of bad loans are modified, there will be a continuation of foreclosures throughout 2009-2010, although at slower pace than what we saw in 2007-2008.

One tool the Obama administration wanted to use that would have put a huge dent in the foreclosure crisis is the bankruptcy modification program. (Basically, a judge would have the power to rewrite a loan and keep the homeowner in their property) At it stands, the republicans are filibustering that legislation, which means foreclosures will continue.

Bottom line – for all of you who enjoy discussing when the bottom will hit, remember one thing. For the past four months, the real estate market has been manipulated by the Feds to create sales activity with the goal of stopping the deflationary cycle. To get a better idea of when the true bottom will hit, one needs to know how many additional moratoriums will be put in place, and how much longer the Feds will keep interest rates artificially low ? If the Feds continue indefinately with the current policies, then we could see an “artificial”bottom sometime this year. But if the moratoriums end, and interest rates go back to more normal levels, all sectors of the market will experience downward price pressures, particularly factoring in high unemployment numbers.

[Bob]

While this debate about RealtyTrac is interesting, its also irrelevant, as we don’t need RealtyTrac to know there are still thousands and thousands of potential foreclosures in the pipeline. Why ? Because the banks, the state of California, and the Federal reserve have said so. The reason they’ve initiated numerous programs into place, including the recent moratoriums, is because they KNOW there are millions of bad loans still out there.

Basically, the feds are throwing all their power into the market in the hopes of reducing a massive deflationary cycle. Whether you or I agree with such federal intervention, the fact is, since last December the combination of loan modifications, moratoriums, and the Feds actions to reduce interest rates have done exactly what they wanted – which was to reduce supply and create an environment where buyers would reenter the market in the short term. But they know that unless the majority of bad loans are modified, there will be a continuation of foreclosures throughout 2009-2010, although at slower pace than what we saw in 2007-2008.

One tool the Obama administration wanted to use that would have put a huge dent in the foreclosure crisis is the bankruptcy modification program. (Basically, a judge would have the power to rewrite a loan and keep the homeowner in their property) At it stands, the republicans are filibustering that legislation, which means foreclosures will continue.

Bottom line – for all of you who enjoy discussing when the bottom will hit, remember one thing. For the past four months, the real estate market has been manipulated by the Feds to create sales activity with the goal of stopping the deflationary cycle. To get a better idea of when the true bottom will hit, one needs to know how many additional moratoriums will be put in place, and how much longer the Feds will keep interest rates artificially low ? If the Feds continue indefinately with the current policies, then we could see an “artificial”bottom sometime this year. But if the moratoriums end, and interest rates go back to more normal levels, all sectors of the market will experience downward price pressures, particularly factoring in high unemployment numbers.

[Bob]

While this debate about RealtyTrac is interesting, its also irrelevant, as we don’t need RealtyTrac to know there are still thousands and thousands of potential foreclosures in the pipeline. Why ? Because the banks, the state of California, and the Federal reserve have said so. The reason they’ve initiated numerous programs into place, including the recent moratoriums, is because they KNOW there are millions of bad loans still out there.

Basically, the feds are throwing all their power into the market in the hopes of reducing a massive deflationary cycle. Whether you or I agree with such federal intervention, the fact is, since last December the combination of loan modifications, moratoriums, and the Feds actions to reduce interest rates have done exactly what they wanted – which was to reduce supply and create an environment where buyers would reenter the market in the short term. But they know that unless the majority of bad loans are modified, there will be a continuation of foreclosures throughout 2009-2010, although at slower pace than what we saw in 2007-2008.

One tool the Obama administration wanted to use that would have put a huge dent in the foreclosure crisis is the bankruptcy modification program. (Basically, a judge would have the power to rewrite a loan and keep the homeowner in their property) At it stands, the republicans are filibustering that legislation, which means foreclosures will continue.

Bottom line – for all of you who enjoy discussing when the bottom will hit, remember one thing. For the past four months, the real estate market has been manipulated by the Feds to create sales activity with the goal of stopping the deflationary cycle. To get a better idea of when the true bottom will hit, one needs to know how many additional moratoriums will be put in place, and how much longer the Feds will keep interest rates artificially low ? If the Feds continue indefinately with the current policies, then we could see an “artificial”bottom sometime this year. But if the moratoriums end, and interest rates go back to more normal levels, all sectors of the market will experience downward price pressures, particularly factoring in high unemployment numbers.

[Bob]

While this debate about RealtyTrac is interesting, its also irrelevant, as we don’t need RealtyTrac to know there are still thousands and thousands of potential foreclosures in the pipeline. Why ? Because the banks, the state of California, and the Federal reserve have said so. The reason they’ve initiated numerous programs into place, including the recent moratoriums, is because they KNOW there are millions of bad loans still out there.

Basically, the feds are throwing all their power into the market in the hopes of reducing a massive deflationary cycle. Whether you or I agree with such federal intervention, the fact is, since last December the combination of loan modifications, moratoriums, and the Feds actions to reduce interest rates have done exactly what they wanted – which was to reduce supply and create an environment where buyers would reenter the market in the short term. But they know that unless the majority of bad loans are modified, there will be a continuation of foreclosures throughout 2009-2010, although at slower pace than what we saw in 2007-2008.

One tool the Obama administration wanted to use that would have put a huge dent in the foreclosure crisis is the bankruptcy modification program. (Basically, a judge would have the power to rewrite a loan and keep the homeowner in their property) At it stands, the republicans are filibustering that legislation, which means foreclosures will continue.

Bottom line – for all of you who enjoy discussing when the bottom will hit, remember one thing. For the past four months, the real estate market has been manipulated by the Feds to create sales activity with the goal of stopping the deflationary cycle. To get a better idea of when the true bottom will hit, one needs to know how many additional moratoriums will be put in place, and how much longer the Feds will keep interest rates artificially low ? If the Feds continue indefinately with the current policies, then we could see an “artificial”bottom sometime this year. But if the moratoriums end, and interest rates go back to more normal levels, all sectors of the market will experience downward price pressures, particularly factoring in high unemployment numbers.

[Bob]

While this debate about RealtyTrac is interesting, its also irrelevant, as we don’t need RealtyTrac to know there are still thousands and thousands of potential foreclosures in the pipeline. Why ? Because the banks, the state of California, and the Federal reserve have said so. The reason they’ve initiated numerous programs into place, including the recent moratoriums, is because they KNOW there are millions of bad loans still out there.

Basically, the feds are throwing all their power into the market in the hopes of reducing a massive deflationary cycle. Whether you or I agree with such federal intervention, the fact is, since last December the combination of loan modifications, moratoriums, and the Feds actions to reduce interest rates have done exactly what they wanted – which was to reduce supply and create an environment where buyers would reenter the market in the short term. But they know that unless the majority of bad loans are modified, there will be a continuation of foreclosures throughout 2009-2010, although at slower pace than what we saw in 2007-2008.

One tool the Obama administration wanted to use that would have put a huge dent in the foreclosure crisis is the bankruptcy modification program. (Basically, a judge would have the power to rewrite a loan and keep the homeowner in their property) At it stands, the republicans are filibustering that legislation, which means foreclosures will continue.

Bottom line – for all of you who enjoy discussing when the bottom will hit, remember one thing. For the past four months, the real estate market has been manipulated by the Feds to create sales activity with the goal of stopping the deflationary cycle. To get a better idea of when the true bottom will hit, one needs to know how many additional moratoriums will be put in place, and how much longer the Feds will keep interest rates artificially low ? If the Feds continue indefinately with the current policies, then we could see an “artificial”bottom sometime this year. But if the moratoriums end, and interest rates go back to more normal levels, all sectors of the market will experience downward price pressures, particularly factoring in high unemployment numbers.

[Bob]

I’ve been following the Temecula Valley market closely for over a year, and while I won’t predict a bottom, I would like to describe what I’ve seen in the last few months.

First, available inventory is much lower now than it was back in December or January. The reason for this is simple – the moratoriums put in place by Fannie/Freddie, the banks, as well as the state of California, reduced supply while record low interest rates increased demand. The pick up in sales isn’t just exclusive to TV, but to most of Southern California. As of March 31, the moratoriums have been temporarily lifted. We should see a significant increase in supply during May and June due to the backlog of foreclosures that didn’t get to market during the first quarter. But, and this is a BIG but, the Feds and Obama, as well as the Governor of California, have said they will use as much intervention as possible to prevent future foreclosures. In fact, the Obama administration is on record as supporting the “reinflation” of the housing market. Personally, I think this type of federal intervention is insanity, and will ultimately end up costing the taxpayers even more in the form of hyper-inflation and the devaluation of the dollar, but thats a subject for a different time.

What does all this mean for Temecula prices ? And has TV hit bottom ?

Well, one thing the reduced supply has caused during the last few months is multiple offer bidding wars on the good properties. At a 4.5% interest rate, many more people can qualify for a loan now than back in 2008 when rates were around 6%. But here’s the catch…the Feds have indirectly brought down mortgage rates due to Bernanke’s decision to purchase over a trillion dollars of US treasuries. As the stock market improves, investors will take money out of the safety of US treasuries and put it into the stock market once again. In fact, that is already happening. As a result, the bond market will suffer, which means mortgage rates will go back up. As rates go up, fewer people will qualify for loans, which will result in a drop in demand for real estate.

So, if you really want to get a closer idea as to when the bottom will hit in Temecula, watch for a few things. Federal or state mandated foreclosure moratoriums – interest rates – and prices in Northern San Diego County. A year ago you couldn’t find a decent property in northern San Diego County for under 400K, while in Temecula there were literally hundreds on the market on any given day. But in the past six months prices have dropped significantly in North County, where you now can find a decent home in the 300K-350K range. Many people purchase in Temecula because it has been far more affordable – but the gap has narrowed in the last six months. The point is, Temecula Valley won’t reach bottom until AFTER northern San Diego county first reaches its own bottom – and that has yet to happen.

[Bob]

I’ve been following the Temecula Valley market closely for over a year, and while I won’t predict a bottom, I would like to describe what I’ve seen in the last few months.

First, available inventory is much lower now than it was back in December or January. The reason for this is simple – the moratoriums put in place by Fannie/Freddie, the banks, as well as the state of California, reduced supply while record low interest rates increased demand. The pick up in sales isn’t just exclusive to TV, but to most of Southern California. As of March 31, the moratoriums have been temporarily lifted. We should see a significant increase in supply during May and June due to the backlog of foreclosures that didn’t get to market during the first quarter. But, and this is a BIG but, the Feds and Obama, as well as the Governor of California, have said they will use as much intervention as possible to prevent future foreclosures. In fact, the Obama administration is on record as supporting the “reinflation” of the housing market. Personally, I think this type of federal intervention is insanity, and will ultimately end up costing the taxpayers even more in the form of hyper-inflation and the devaluation of the dollar, but thats a subject for a different time.

What does all this mean for Temecula prices ? And has TV hit bottom ?

Well, one thing the reduced supply has caused during the last few months is multiple offer bidding wars on the good properties. At a 4.5% interest rate, many more people can qualify for a loan now than back in 2008 when rates were around 6%. But here’s the catch…the Feds have indirectly brought down mortgage rates due to Bernanke’s decision to purchase over a trillion dollars of US treasuries. As the stock market improves, investors will take money out of the safety of US treasuries and put it into the stock market once again. In fact, that is already happening. As a result, the bond market will suffer, which means mortgage rates will go back up. As rates go up, fewer people will qualify for loans, which will result in a drop in demand for real estate.

So, if you really want to get a closer idea as to when the bottom will hit in Temecula, watch for a few things. Federal or state mandated foreclosure moratoriums – interest rates – and prices in Northern San Diego County. A year ago you couldn’t find a decent property in northern San Diego County for under 400K, while in Temecula there were literally hundreds on the market on any given day. But in the past six months prices have dropped significantly in North County, where you now can find a decent home in the 300K-350K range. Many people purchase in Temecula because it has been far more affordable – but the gap has narrowed in the last six months. The point is, Temecula Valley won’t reach bottom until AFTER northern San Diego county first reaches its own bottom – and that has yet to happen.

[Bob]

I’ve been following the Temecula Valley market closely for over a year, and while I won’t predict a bottom, I would like to describe what I’ve seen in the last few months.

First, available inventory is much lower now than it was back in December or January. The reason for this is simple – the moratoriums put in place by Fannie/Freddie, the banks, as well as the state of California, reduced supply while record low interest rates increased demand. The pick up in sales isn’t just exclusive to TV, but to most of Southern California. As of March 31, the moratoriums have been temporarily lifted. We should see a significant increase in supply during May and June due to the backlog of foreclosures that didn’t get to market during the first quarter. But, and this is a BIG but, the Feds and Obama, as well as the Governor of California, have said they will use as much intervention as possible to prevent future foreclosures. In fact, the Obama administration is on record as supporting the “reinflation” of the housing market. Personally, I think this type of federal intervention is insanity, and will ultimately end up costing the taxpayers even more in the form of hyper-inflation and the devaluation of the dollar, but thats a subject for a different time.

What does all this mean for Temecula prices ? And has TV hit bottom ?

Well, one thing the reduced supply has caused during the last few months is multiple offer bidding wars on the good properties. At a 4.5% interest rate, many more people can qualify for a loan now than back in 2008 when rates were around 6%. But here’s the catch…the Feds have indirectly brought down mortgage rates due to Bernanke’s decision to purchase over a trillion dollars of US treasuries. As the stock market improves, investors will take money out of the safety of US treasuries and put it into the stock market once again. In fact, that is already happening. As a result, the bond market will suffer, which means mortgage rates will go back up. As rates go up, fewer people will qualify for loans, which will result in a drop in demand for real estate.

So, if you really want to get a closer idea as to when the bottom will hit in Temecula, watch for a few things. Federal or state mandated foreclosure moratoriums – interest rates – and prices in Northern San Diego County. A year ago you couldn’t find a decent property in northern San Diego County for under 400K, while in Temecula there were literally hundreds on the market on any given day. But in the past six months prices have dropped significantly in North County, where you now can find a decent home in the 300K-350K range. Many people purchase in Temecula because it has been far more affordable – but the gap has narrowed in the last six months. The point is, Temecula Valley won’t reach bottom until AFTER northern San Diego county first reaches its own bottom – and that has yet to happen.

[Bob]

I’ve been following the Temecula Valley market closely for over a year, and while I won’t predict a bottom, I would like to describe what I’ve seen in the last few months.

First, available inventory is much lower now than it was back in December or January. The reason for this is simple – the moratoriums put in place by Fannie/Freddie, the banks, as well as the state of California, reduced supply while record low interest rates increased demand. The pick up in sales isn’t just exclusive to TV, but to most of Southern California. As of March 31, the moratoriums have been temporarily lifted. We should see a significant increase in supply during May and June due to the backlog of foreclosures that didn’t get to market during the first quarter. But, and this is a BIG but, the Feds and Obama, as well as the Governor of California, have said they will use as much intervention as possible to prevent future foreclosures. In fact, the Obama administration is on record as supporting the “reinflation” of the housing market. Personally, I think this type of federal intervention is insanity, and will ultimately end up costing the taxpayers even more in the form of hyper-inflation and the devaluation of the dollar, but thats a subject for a different time.

What does all this mean for Temecula prices ? And has TV hit bottom ?

Well, one thing the reduced supply has caused during the last few months is multiple offer bidding wars on the good properties. At a 4.5% interest rate, many more people can qualify for a loan now than back in 2008 when rates were around 6%. But here’s the catch…the Feds have indirectly brought down mortgage rates due to Bernanke’s decision to purchase over a trillion dollars of US treasuries. As the stock market improves, investors will take money out of the safety of US treasuries and put it into the stock market once again. In fact, that is already happening. As a result, the bond market will suffer, which means mortgage rates will go back up. As rates go up, fewer people will qualify for loans, which will result in a drop in demand for real estate.

So, if you really want to get a closer idea as to when the bottom will hit in Temecula, watch for a few things. Federal or state mandated foreclosure moratoriums – interest rates – and prices in Northern San Diego County. A year ago you couldn’t find a decent property in northern San Diego County for under 400K, while in Temecula there were literally hundreds on the market on any given day. But in the past six months prices have dropped significantly in North County, where you now can find a decent home in the 300K-350K range. Many people purchase in Temecula because it has been far more affordable – but the gap has narrowed in the last six months. The point is, Temecula Valley won’t reach bottom until AFTER northern San Diego county first reaches its own bottom – and that has yet to happen.

[Bob]

I’ve been following the Temecula Valley market closely for over a year, and while I won’t predict a bottom, I would like to describe what I’ve seen in the last few months.

First, available inventory is much lower now than it was back in December or January. The reason for this is simple – the moratoriums put in place by Fannie/Freddie, the banks, as well as the state of California, reduced supply while record low interest rates increased demand. The pick up in sales isn’t just exclusive to TV, but to most of Southern California. As of March 31, the moratoriums have been temporarily lifted. We should see a significant increase in supply during May and June due to the backlog of foreclosures that didn’t get to market during the first quarter. But, and this is a BIG but, the Feds and Obama, as well as the Governor of California, have said they will use as much intervention as possible to prevent future foreclosures. In fact, the Obama administration is on record as supporting the “reinflation” of the housing market. Personally, I think this type of federal intervention is insanity, and will ultimately end up costing the taxpayers even more in the form of hyper-inflation and the devaluation of the dollar, but thats a subject for a different time.

What does all this mean for Temecula prices ? And has TV hit bottom ?

Well, one thing the reduced supply has caused during the last few months is multiple offer bidding wars on the good properties. At a 4.5% interest rate, many more people can qualify for a loan now than back in 2008 when rates were around 6%. But here’s the catch…the Feds have indirectly brought down mortgage rates due to Bernanke’s decision to purchase over a trillion dollars of US treasuries. As the stock market improves, investors will take money out of the safety of US treasuries and put it into the stock market once again. In fact, that is already happening. As a result, the bond market will suffer, which means mortgage rates will go back up. As rates go up, fewer people will qualify for loans, which will result in a drop in demand for real estate.

So, if you really want to get a closer idea as to when the bottom will hit in Temecula, watch for a few things. Federal or state mandated foreclosure moratoriums – interest rates – and prices in Northern San Diego County. A year ago you couldn’t find a decent property in northern San Diego County for under 400K, while in Temecula there were literally hundreds on the market on any given day. But in the past six months prices have dropped significantly in North County, where you now can find a decent home in the 300K-350K range. Many people purchase in Temecula because it has been far more affordable – but the gap has narrowed in the last six months. The point is, Temecula Valley won’t reach bottom until AFTER northern San Diego county first reaches its own bottom – and that has yet to happen.

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