[hipmatt]

What this boils down to is supply and demand. There are so many more homes available now in socal vs 10 years ago, that its insane, I don’t have the numbers, but I bet that in Riverside, Orange, and San Diego counties there are over twice as many existing homes now than there was in 1997. Has the population of these areas doubled as well? Ricks site here states that there are more new homes being built than there are people moving to these areas.

Now that the speculation is over, only first time home buyers can affect this market. Why? People moving up or down do nothing to change the inventory of homes available. They are also the only ones who can afford it as well. They are counting on the equity of their old home to get them a decent payment in a new home. Since they will be selling a home to buy a new one, the supply isn’t really decreasing. And then there are the first time home buyers, can they afford a home in socal with these current prices? How many people or even couples can afford $400k plus just to get into a starter home? Do they have a down payment? Doubt it. Lenders are going belly up, and lending standards have started to change, and they will continue to change for along time.

Lowering the interest rates can’t really help either. Rates are already insanely low, historically very low, America and Americans are maxed out with credit and debt, we have a negative savings rate, and a dollar which is loosing value to other world currencies. Investors need to fund our debt, and they soon will stop that as it will be a bad investment for them.

Many of the newer jobs that have been created within the last few years have been due to money put into the economy cash out refies, and easy credit as well, making our economy look stronger than it really is. As the big spending comes to an end, jobs will be lost, and profits will come down too. Cars sales will drop, construction will drop hard,lenders/agents/escrow will be affected, home improvement, granite, landscape, retail, pool installs, will all be hit hard. More and more people will not be able to buy homes, even at lower prices, and some who own, will be forced to sell, further increasing the amount of inventory. Some that have to refi due to rate resets, will finally get it that they couldn’t afford the home in the first place and either try to sell or just walk away. Short sales, repos, and other situations like these are already filling up the MLS, craigslist and the local papers.

So the supply of homes is going up and the demand is going down due to a lack of qualified buyers. The only way this can continue is if wages double or triple like the recent home prices.

[hipmatt]

Harveston is way overpriced, I live there too, also rent, you get a big ego on a small lot. The homes are nice, the lake..uh pond is nice with reclaimed water, you can’t swim in it, you have to pay to rent a paddle boat, wow! Looks nice there, yes, HOA is at least $100, I heard $132. Taxes are high!!!! 2% get real Thats $8k per year IF you get the house for $400k, which you won’t. These sellers are smoking crack here, they have more pride than brains.

IMO you should never buy a home with 0 down, no offense, but I just don’t get it. How can you make so much and have no down payment? My wife and I make half of what you make, pay more for rent and we could still save up for a down payment. I also expect you to use an int. only loan.. completely bad news. Still your payment would be lucky to be under $3000 per month even if you got the place for $350k. YOu will be paying at least twice what you currently are, plus you will loose all the money as the housing crashes. Are you prepared to owe $350-$400k on a house in 5 years that could be worth $250k? or less?

RENT RENT and RENT!

[hipmatt]

Wow, an American thats thinking logically, what a shock. You have laid out one of many reasons why housing IS currently NOT worth close to what it should be.

If you want a McMansion, you need to change a few bad habits that you have. First, stop saving your money. It is common knowledge that this will get you nowhere. All the successful, McMansion and Hummer owners use loans. They’re easy to get, and you don’t even need to prove your income or credit worthiness. The bad part is that you don’t even pay of your house, but you shouldn’t worry about this petty fact. You will own a home. Second, don’t worry about that down payment either, you can finance it all baby!! And finally, you need to get all emotional about buying a house, and stop doing math, that won’t help either. Make sure you find a nice high tax area too! Good luck.

[hipmatt]

I wouldn’t buy a house next to anything or nothing, right now.

[hipmatt]

I just want to say thanks for all the input and positive remarks. For the next few months I will be researching my options carefully. I am taking it all in, thanks, Matt

[hipmatt]

I appreciate all the info. I am also aware of the large sums of money you can make in the pron industry, but I’m not willing to go that route due to personal beliefs, and my wife wouldn’t tolerate that either.

It seems that a lot of people here on this board are in the IT field. I think I would like to look into this, do you recommend any particular schools?

[hipmatt]

OMG, I better buy now or I’ll get priced out of the market, then what?

[hipmatt]

Well, to the original poster, I believe you have piggingtons all wrong. I would summarize this blog as info on the housing bubble, especially so cal. I think its safe to say that most everyone here believes housing is in a bubble and is way over priced. This is a pro-housing correction blog, not a pro-california blog. Generally people don’t bash other places in the country to live.

You have every right to enjoy Texas, and I hope you do. I am definitely considering the move out of CA, and I will consider San Antonio and Austin.

[hipmatt]

Chris Johnston

I am not nearly as bearish as most people in here, but I still feel you should wait. IE will get hit harder than coastal areas, nicer areas historically have always held value better than the lessor areas. That drive is going to be very difficult and a quality of life issue. Wait until the end of 07, if we have not seen a steeper drop begin by then, I don't think one will happen. This year will tell us alot. If the insiders can keep this thing afloat during this first year of resets, I think we will be able to conclude that a major drop is not going to happen. If they can't, all bets are off.

 I don't see how the insiders keeping this thing afloat has anything to do with the inevitable.  Insiders can only postpone the inevitable, with the help of the fed reserve, the drive by media, and most importantly the debt loving, herd of sheep, brainless Americans themselves.  BTW, the longer this is postponed, the worse it will be.  CA real estate IS NOT worth these current prices.  Not even close.  We have covered the fundamentals, the historical prices, incomes vs. home prices, rents vs home prices, all of this over and over again on this board.  The only thing that can keep prices up is a huge increase in wages/incomes and a reduction of inventory.  Neither is going to happen anytime soon.  Especially in Temecula, one of the most "bubblicious" areas in the country.

 

[hipmatt]

I agree with former owner nearly 100%. I have lived here since 1990 (Temecula). Temecula is the only city I would consider over here. I have to be honest, I strongly advise you to NOT move here unless you work here. I know so many people who ROT on the 91fwy commuting to the OC. They hate it, some spend at least 4 hours per day in the car commuting. Is that how you want to live your life? There is nothing wrong with renting, especially now. Don’t even ask about the bottom, cause its nowhere in sight. Think 2010ish for that. You know the old saying,… the grass is always greener.

Heres my current pro and con list for the Temecula Valley. I posted it in another thread so I apologize for others who may have read it.

Temecula pros and cons
Pros:
-great weather, I mean GREAT weather (many sunny days)
-one of least smoggy cities in socal(afternoon breeze common)
-general topography is attractive(natural rolling hills/trees)
-relatively close to mountains, beaches, deserts, big cities(LA/SD)
-nice wineries(kind of)and old town(kind of)
-pretty clean and safe
-seems to be great for families and kids(tons of
schools/activities/sports, good schools)
-many churches
-decent amount of parks
-best city planning of all nearby cities(clearly not perfect)
-some nice dinning options
-still some ranches/equestrian left
-Pechanga Casino?(mostly a big CON for me)
-busy mall

Cons:
-growing way too fast
-city traffic is horrible& murrieta even worse
-freeway traffic horrible at times(215 is the worst)
-expensive homes(by nature this may end soon)
-limited singles activity/nightlife
-most careers are in retail/education/Guidant Corp./real estate:( ,very few college degree or corporate type jobs here
-most people with real jobs commute to SD/OC/LA/Riverside and with BAD traffic getting worse and pricey gas getting pricier this is a BIG Con!!!
-even though many, many dinning options, waits can still be over an hour
-Pechanga Casino – causes traffic, gambling addictions, alcoholism, promotes the evil and sin in many(just my .02)
-rat race is here to stay(people in New York City appear to be more mellow)
-rude/materialistic/overly vain/fake/snobby population growing at an alarming rate. The keeping up with the Jonse’s reality show should be filmed here.
-not the quiet ranch like town it once was
-mass transit hasn’t really arrived yet?
-very inconsiderate drivers and many times dangerous. Local drivers are the worst and rudest I’ve seen, yet they seem to be ignored by local PD especially Murrieta PD, but you will get pulled over for tinted windows.
-busy mall is packed full of “Mall Rats” who feast on energy drinks and vanity.
-culturally not that diverse
-Medical facilities are sub-par, packed, and just suck. Best local hospital is in Fallbrook. The two in Murrieta are bad.
-no local rivers and the few local lakes we have are filthy/crowded or not suitable for recreation
-closest 4 year college over 35 min away
-closest community college is 20 min away and is mediocre
-DMV, Costco, IN’n’OUT are BERSERK and require extreme patience almost all the time!!
-even though the city is growing fast and many people live here, it seems that your business still becomes everyone’s business

[hipmatt]

I rent too, sold in summer 05, and our quality of life has increased. The home we rent is much nicer than one we could afford to buy. The house we are in is an executive home with all the upgrades, its in town, in a safer area, closer to work, my parents and her perents too. There are many other rentals that I believe would suit us well if we needed to move, and it might be an inconvenience to move, but its worth the piece of mind knowing my money is going up in value while many home owners are losing money.

[hipmatt]

I agree with the above 100%. Responsibility has gotten thrown out the window for a long time here now.

you are lazy=just get welfare
you are a slut=just get an abortion
you are financially dumb=just go bankrupt
can’t save a dime=take out a really bad loan for a house you can’t afford, then walk away, blaming everyone but yourself

Matter of fact, its had to do something wrong anymore, and have it be from your fault. Its always someone else’s.

[hipmatt]

Rent on a home in Tem is anywhere from 1500-2500 depending on the size of home, and how much crack the owner is smoking. But the median seems to be about $1750, just check craigslist.

[hipmatt]

If what I read is correct, I certainly can’t see this as proof of strong sellers market coming.

[hipmatt]

The bigger they are, the harder they fall!

[Author]

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