[FormerOwner]

As a side point, I would like to see a return to smaller houses and more density.

Maybe this is already starting to happen in a small gradual way. Notice that in KB’s new prices, the larger homes aren’t that much more $ than the smaller ones: 34% more s.f. only costs 13% more $.

Actually, I would be willing to pay more for a modest sized single story than a behemoth 2 story with behemoth electric bills in the summer. That extra s.f. is more of a liability than an asset. In addition to utility bills, eventually everything in a house will wear out and the bigger houses just have more stuff that needs to be maintained, repainted, and eventually replaced. And for what? I’d like it if new tracts could be zoned and designed so that the 3600 s.f. house could be built as duplex, with two 1800 s.f. townhomes on each 7000 s.f. lot, sharing the yard. They used to do that a lot back east and I think it’s great. I think there would be a market for that in California, in areas close to jobs especially. It’s better than a typical condo but more practical than an SFR. I often wonder what is going to become of all the 3000 – 4000 s.f. 2 and 3 story tract homes in the Temecula Valley long term. I’m glad I sold mine and I learned my lesson about “bigger is not always better”. Live and learn.

[FormerOwner]

As a side point, I would like to see a return to smaller houses and more density.

Maybe this is already starting to happen in a small gradual way. Notice that in KB’s new prices, the larger homes aren’t that much more $ than the smaller ones: 34% more s.f. only costs 13% more $.

Actually, I would be willing to pay more for a modest sized single story than a behemoth 2 story with behemoth electric bills in the summer. That extra s.f. is more of a liability than an asset. In addition to utility bills, eventually everything in a house will wear out and the bigger houses just have more stuff that needs to be maintained, repainted, and eventually replaced. And for what? I’d like it if new tracts could be zoned and designed so that the 3600 s.f. house could be built as duplex, with two 1800 s.f. townhomes on each 7000 s.f. lot, sharing the yard. They used to do that a lot back east and I think it’s great. I think there would be a market for that in California, in areas close to jobs especially. It’s better than a typical condo but more practical than an SFR. I often wonder what is going to become of all the 3000 – 4000 s.f. 2 and 3 story tract homes in the Temecula Valley long term. I’m glad I sold mine and I learned my lesson about “bigger is not always better”. Live and learn.

[FormerOwner]

2001 would be my best guess – this is conservative. 2002-2005 is when the ridiculous price appreciation happened in Temecula and none of it was based on fundamentals.

Having said that, I wouldn’t be surprised to see 1999 pricing again though.

[FormerOwner]

2001 would be my best guess – this is conservative. 2002-2005 is when the ridiculous price appreciation happened in Temecula and none of it was based on fundamentals.

Having said that, I wouldn’t be surprised to see 1999 pricing again though.

[FormerOwner]

Yes, here’s an example per cyberhomes.com:

http://www.cyberhomes.com/propertydetails.aspx?propid=61497190&bhcp=1

xx876 Sandpiper Ln, Temecula, CA 92591
4/28/2006 Sale Price: $686,000

This house was bought by an investor who has been trying to sell it, chasing the market down. It appears not to be on the market anymore so I’m not sure what’s going on.

And, actually, there are other houses in the same tract that are even DEEPER underwater. Check out the comps on cyberhomes.com. The range of sale prices for this model last year was 632K – 789K. That same exact model is now going for 453K. 789K vs 453K is a 43% price difference or 336K. Now the 789K house probably had a lot of upgrades but I doubt that it would sell for anything over the 400’s now that the builder is selling the new ones for 453K. That 789K house is probably close to 300K underwater, I would guess. Incredible!

[FormerOwner]

Yes, here’s an example per cyberhomes.com:

http://www.cyberhomes.com/propertydetails.aspx?propid=61497190&bhcp=1

xx876 Sandpiper Ln, Temecula, CA 92591
4/28/2006 Sale Price: $686,000

This house was bought by an investor who has been trying to sell it, chasing the market down. It appears not to be on the market anymore so I’m not sure what’s going on.

And, actually, there are other houses in the same tract that are even DEEPER underwater. Check out the comps on cyberhomes.com. The range of sale prices for this model last year was 632K – 789K. That same exact model is now going for 453K. 789K vs 453K is a 43% price difference or 336K. Now the 789K house probably had a lot of upgrades but I doubt that it would sell for anything over the 400’s now that the builder is selling the new ones for 453K. That 789K house is probably close to 300K underwater, I would guess. Incredible!

[FormerOwner]

To everyone predicting a 50% drop, some areas are more than half way there already!

[FormerOwner]

To everyone predicting a 50% drop, some areas are more than half way there already!

[FormerOwner]

My view is that the US has been in a long-term decline since the Vietnam War. There were definitely periods of peace and prosperity but overall the structural problems in the economy and in society in general have been showing themselves more and more. The TIME article talks about the problems of inflation, falling real wages, and entitlements and that they’d be a threat to the supremacy of the US if not addressed. Well, the article was right, they were and are a threat and have never been adressed. We’ve been living on borrowed time (and money) since the late 60’s.

I am also a Gen X’er and agree that my generation is F’d. We just have to make peace with it and learn to live simpler lives than the Baby Boomers. I think it’s not that hard to do if you have the right mindset. One of the key things in the next few decades will be flexibility. People will need to be open minded about how they manage their finances, where/how they live, etc. in order to adjust to the changes that are coming.

As far as buying a house, patience is a virtue. Waiting until the numbers pencil out and you’re not stretched too thin will pay off. A keeping up with the Joneses mentality is the best plan to go bankrupt! The Joneses aren’t even keeping up with the Joneses – they just look like they are. I see debt people.

Just think, once the Boomers retire or kick off, who will buy their houses? Us! How much will we be willing/able to pay? Not much! The problem will take care of itself. I think Gen Y will be even poorer than Gen X too. Does anyone really believe all the soon-to-be legalized illegal aliens will be pay these inflated house prices? Ha!

[FormerOwner]

My view is that the US has been in a long-term decline since the Vietnam War. There were definitely periods of peace and prosperity but overall the structural problems in the economy and in society in general have been showing themselves more and more. The TIME article talks about the problems of inflation, falling real wages, and entitlements and that they’d be a threat to the supremacy of the US if not addressed. Well, the article was right, they were and are a threat and have never been adressed. We’ve been living on borrowed time (and money) since the late 60’s.

I am also a Gen X’er and agree that my generation is F’d. We just have to make peace with it and learn to live simpler lives than the Baby Boomers. I think it’s not that hard to do if you have the right mindset. One of the key things in the next few decades will be flexibility. People will need to be open minded about how they manage their finances, where/how they live, etc. in order to adjust to the changes that are coming.

As far as buying a house, patience is a virtue. Waiting until the numbers pencil out and you’re not stretched too thin will pay off. A keeping up with the Joneses mentality is the best plan to go bankrupt! The Joneses aren’t even keeping up with the Joneses – they just look like they are. I see debt people.

Just think, once the Boomers retire or kick off, who will buy their houses? Us! How much will we be willing/able to pay? Not much! The problem will take care of itself. I think Gen Y will be even poorer than Gen X too. Does anyone really believe all the soon-to-be legalized illegal aliens will be pay these inflated house prices? Ha!

[FormerOwner]

If gas prices go much higher, all those French Valley people will be trying to unload their lifted 4×4’s next year along with their McMansions.

[FormerOwner]

If gas prices go much higher, all those French Valley people will be trying to unload their lifted 4×4’s next year along with their McMansions.

[FormerOwner]

fat,

I’ve wondered the same thing myself. I think there are a few categories of buyers up here in Temecula:
1) People that cashed out of houses in SD and put a huge down payment on a McMansion. Their loan payments probably aren’t that bad but their commute is a nightmare and their property taxes are pretty darn high – these two things were rationalized away.
2) People that just think real estate never goes down and do anything they have to do to buy a McMansion. I suspect many of them got teaser rate loans and they will end up in foreclosure once the interest rate resets. This includes owner-occupants and investors.
3) Realtors. They seem to be drinking their own Kool-Aid up here and many of them are in trouble trying to unload “investment” properties. Good luck with that!
4) Stonewood aka mortgage scam.
5) I don’t think 1-4 account for anywhere near all of the houses sold in the last few years and I can’t imagine anyone in their right mind paying those prices to live in Temecula. I think more revelations are still to come out as the housing bubble deflates – these will shed more light on what was going on.

[FormerOwner]

fat,

I’ve wondered the same thing myself. I think there are a few categories of buyers up here in Temecula:
1) People that cashed out of houses in SD and put a huge down payment on a McMansion. Their loan payments probably aren’t that bad but their commute is a nightmare and their property taxes are pretty darn high – these two things were rationalized away.
2) People that just think real estate never goes down and do anything they have to do to buy a McMansion. I suspect many of them got teaser rate loans and they will end up in foreclosure once the interest rate resets. This includes owner-occupants and investors.
3) Realtors. They seem to be drinking their own Kool-Aid up here and many of them are in trouble trying to unload “investment” properties. Good luck with that!
4) Stonewood aka mortgage scam.
5) I don’t think 1-4 account for anywhere near all of the houses sold in the last few years and I can’t imagine anyone in their right mind paying those prices to live in Temecula. I think more revelations are still to come out as the housing bubble deflates – these will shed more light on what was going on.

[FormerOwner]

Here’s the latest on the Stonewood debacle:

“One of several men accused of running a vast mortgage scam has allegedly begun to launder money through his wife’s clothing boutique and may be preparing to flee the country, according to a lawsuit brought Tuesday by a fresh pair of aggrieved investors.”

http://www.nctimes.com/articles/2007/05/23/news/californian/4_02_405_22_07.txt

[Author]

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