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Convergence of existing & resale prices

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POSTED November 12, 2010 2:43 a.m.
The Manteca housing gods must be crazy.

New home builders are starting to peel off a small but growing number of people who had thought resale was the least expensive way to go.

It is happening for two reasons.

First, new home builders have re-designed their offerings making them somewhat smaller without sacrificing amenities by cutting down on gingerbread angles that are more costly to bring to market models that compete well with the resale market.

Even more important, though, resale prices have strengthened in the past year enough that the new versus existing are meeting each other in a viable segment of the housing market.

You won’t find it at the median which is at $184,900 for an existing home that has closed escrow so far this year.

Instead it is roughly at the threshold that separates the lower two thirds of all home purchases from the upper third.

In Manteca, that price point is between $215,000 and $250,000.

In a normal, market - and the current market is anything but - they’d be about a $10,000 to $20,000 minimum price difference between relative new existing homes  and new homes  with the resale costing less.

Up until perhaps mid-year the people buying new homes in Manteca were basically in a position to afford to do so plus they wanted new and not an existing home. Now that price is becoming less of an issue due to aggressive pricing by builders and resale prices that are on a slight rise that isn’t necessarily the case anymore.

Pricing is now giving people who never would have considered a new home due to cost a rare opportunity to buy new instead of in the resale market.

And that is something that hasn’t happened in Manteca for perhaps 30 years.

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