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It’s weird time for resale market

From trying to flip a McMansion to new listing at 1990 pricing

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It’s weird time for resale market

Some Realtors fear Manteca is starting to become a "city of rentals" given the number of investors still snapping up foreclosed homes.

HIME ROMERO/The Bulletin


POSTED August 7, 2009 1:35 a.m.
Buyers are coming over the Altamont Pass again.

However, it isn’t the Bay Area buyer of yesteryear.

They are bringing cash – and conventional loans with sizeable down payments – and a lot of them aren’t buying to own.

Realtor after Realtor contacted by the Bulletin agrees on one thing – the Manteca housing market has gotten progressively weirder in the past six months and that first-time buyers need to expect to make numerous offers before striking pay dirt.

One Realtor fears Manteca could “become a city of rentals.” Another agent notes that several banks are essentially having nothing to do with offers from those using FHA loans. A third agent indicated there are banks willing to cooperate with FHA buyers and will lower their asking price when they have a solid offer by a couple of thousands of dollars to make the deal work. Still another agent points to buyers looking to flip homes.

 In the middle of all of this, a bank put a home on the market for $54,900 at 215 E. North St. with 932 square feet featuring two bedrooms and one bathroom.

“I haven’t seen prices like that for a single family home since 1990,” noted Jennifer Harden with Coldwell Banker Crossroads Real Estate.

If that doesn’t strike you as strange, consider this: The 4,336-square-foot McMansion that closed escrow at 673 Vasconcellos Avenue for $230,000 on June 8 is back on the market for $339,900.

An out-of-state investor bought it, made some improvements, and now wants to sell it.

None of this is boding well for many first-time buyers. Even the homes being offered for $54,900 is not necessarily a good thing as FHA buyers are forced to bid higher to compete with cash buyers and if the home doesn’t appraise, they’re out of luck.

Big difference in Manteca market in 22 months
Manteca’s resale housing market has coming a long way in 22 months.

Back in September 2007 there were 651 homes available on the resale market. Based on the pace of home buying tracked by closed escrows, that was the equivalent of a 21.7-month supply.

Today, there are 160 homes available within Manteca’s city limits or the equivalent of a 1.43-month supply based on market absorption.

In normal times that would put upward pressure on prices. It has this time but in a bizarre way.  A number of banks are deliberately under pricing foreclosures that go back on the market to attract more buyers in an attempt to get a bidding frenzy going. Usually it generates $10,000 or so above the asking price but when all is said and done it is usually what many real estate professionals expected the property would of sold for in the first place.

Because three bedroom and four bedroom floor plans with at least two bathrooms have become so reasonably priced, those in fair condition or better are fetching prices that have essentially stabilized that sector of the market.

Still dropping are the super big tract homes – particularly those without a lot of bells and whistles – and the two bedroom homes as well as condos and patio homes.

Resale houses are $34,000 lower in Stanislaus County
The farther you drive from the Bay Area, the lower the prices are.

That rule that guided buyers during the red-hot days of housing markets is still true today. While Manteca’s median selling price for existing home sales is at $179,794, it is at $135,000 for Stanislaus County.
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