Location Location Location..... how many times have you heard that when looking at houses. But with the drastic drops in the cities on the outer edges of civilization is the location equation broken. Is a house in Corona really worth double what the same house is selling for in Hemet? There's always been a premium the closer you are to the OC. I don't recall it being double (or higher). It was 30%, 40% or maybe even 50% if you were really out in the sticks. Currently though it's 100% or even 150%.
Lets compare two similar homes.
First in Hemet. 1433 Veronica Trail. This is a 2005 vintage home with 3105 sq/ft having 5 bedrooms and 3.5 baths. The lot is average at 6500 sq/ft. The home is in good shape and the kitchen has all the modern niceties like granite counters. This home is an REO, it's been on the market for 80 days with no sale. So chances are the price is too high. That price is $170K or $55 sq/ft. Payments with 5% down are approx $900/mo plus taxes.
Our comparable home in Corona is 13692 Ruby Ave (in Eastvale). This home built in 2004 also has 5 bedrooms and 3.5 baths. It's slightly larger at 3271 sq/ft. It also looks nice and has new (cheap) carpet. On the negative side, the kitchen does have the old white tile counters and the lot is 1000 s/f smaller at 5600 s/f. It does have better curb appeal because some one is watering the grass. This one is asking $370k. payments with 5% down are $1900/mo plus much higher taxes. You also need double the down payment.
That's a $200k difference for fairly similar properties. Or you can look it another way. You could buy two homes in Hemet for the price of the Corona home. That way when your spouse pisses you off you have somewhere to go.
So, is it worth $200k to live in Corona? The stores are the same, the restaurants are the same, the weathers the same, both have several very nice golf courses but Hemet has a huge lake. I don't think any one will argue that Corona is a better area than Hemet. But is it worth $200k more to live in Corona? Think what you can do with that extra cash you are not spending if you buy the Hemet house. You can pad your 401K or you can pay the house off in 10 or 15 years, then relax knowing you have no mortgage payment to worry about. You can take nice vacations and drive better cars. Or live on one income, something unheard of in Southern California 5 years ago. One parent can stay home and raise the kids, what a concept!
Sure, if you work in LA or the OC this option might not be very attractive. But if you are a nurse or a have an occupation that can go anywhere, why would you sign up for $200k more debt than you have to. And it's not just Hemet that has these prices. They can be found in Winchester, Perris, Moreno Valley, Lake Elsinore, Menifee etc.