Friday, June 6, 2008
Temecula takes a beating in the LA Times
That's the headline from the LA Times today. Poor Temecula, here's a few choice lines from the article.
At first glance, the house looked like so many others in Temecula: five bedrooms, mushroom-colored stucco walls, a seven iron away from a dapper golf course where two men prepared to tee off. A closer look at the lawn, however, revealed that it was dead and crunchy -- and had been spray-painted green. The paint came courtesy of neighbors, in the hope that it might be less evident to passersby that the house was empty -- foreclosed and left to the elements, with no running water, no electricity and little chance of new occupants any time soon.
It wasn't supposed to happen here. Not like this. The crashes are expected to hit hard in the Fontanas and the Perrises of the world--Still, the downturn has been startling here because Temecula has been sold, successfully, as a sort of Napa of Southern California: a place of wineries and hot-air balloons and Mediterranean-style bluffs that trap the sea air, even this far inland.
Today, said Rich Johnston, Temecula's deputy director of building and safety and code enforcement, as many as 15% of Temecula's 22,500 single-family homes are bank-owned or in some stage of foreclosure.
In a business park near Edwards' office, Bob Smith was presiding over a going-out-of-business sale at a children's store called Cat's Cradle, which he manages. Merchandise had been discounted by as much as 90%.
Much of the store's business was in children's furniture: cribs, changing tables and such. Many of those sales were made to people filling a new house with furniture or those who were using home equity lines to shop.
With the real estate collapse, those customers vanished. On average during its seven years, the store drew from 60 to 80 customers on a weekend. In March, that number dropped dramatically; on some weekends, the store drew five customers. Four other furniture stores in the area have gone out of business, Smith said.
"It was shocking," said Smith, 50, who will be out of a job after the store closes. "We've done all the advertising we can. We've done all the promotions we can. There's nothing left to do but close up. I wonder if people understand just how bad the economy is right now. Temecula just grew too fast."
Gary Lupo, who has been in Riverside County real estate for 31 years, specializes in conducting assessments of houses for banks. He said homes in the area could lose 80% of the gains in value that have been made since 2001. (X-comment, they will be lucky if that's all they lose). "This was all caused by greed -- on the part of everyone," Lupo said.