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Shrinking resale inventory far cry from 2 years ago

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POSTED September 8, 2009 2:30 a.m.

It was doom and gloom two years ago.


Nothing was selling in the Manteca housing resale market.


Realtors were happy when collectively more than one home closed escrow in a given week. Buyers were staying away in droves. Median resale prices had reached a nose-bleeding $413,000 or a level that was almost seven times the average household income in Manteca.


It didn’t really matter for those living and working in Manteca who were still renting and wanted to buy. Not only is the affordability level considered 2.5 times or less one’s household income but more than 90 percent of homes were being snapped up by those crossing the Altamont Pass to seek relief from much more daunting prices in the Bay Area.


At the peak of the sales slowdown in September 2007 there were 651 existing homes for sale in Manteca. People caught up in the euphoria of loans that ran the gamut from “no down” or substantially lower interest rates for the first two to three years to those where stated income was, to put it politely, fudged were desperate to sell as foreclosure notices started flowing.


What a difference 24 months can make.


As of Friday there were 150 resale homes available in Manteca with 218 sales pending. Sales – after just eight months into 2009 – are more than double the entire year of 2006 with 818 closed deals compared to 402.


Now instead of one home closing escrow in a given week home transactions are being completed at the clip of 3.2 homes a day.


Two years ago, a number of banks were so eager and overstaffed because of a drop off in business that they could close escrow in a week if they got hold of a viable offer. Now it isn’t unusual for listings to get 20 offers within days and for those with FHA loans to take up to two months to close escrow.


The median resale price has gone from a record high of $413,000 at the end of 2006 down to $177,500.


And in terms of the strength of the market, the current number of homes available represents a 1.9-month supply assuming every home based on the pace of homes selling. Back in September of 2007 the 651 available homes would have taken 21.7 months to sell based on the absorption rate at the time.


There are more foreclosures coming but not at a pace fast enough for first-time buyers who are trying to take advantage of unprecedented affordability levels while competing with investors willing to pay cash.


Real estate agents who work with banks such as Brad Young of PMZ Real Estate said there is no conspiracy to keep houses off the market. Young noted banks are struggling with making sure everything is done to comply with laws that require them to make every effort to work with owners who are going into default. It is complicated further by the fact each situation is different.

To contact Dennis Wyatt, e-mail dwyatt@mantecabulletin.com


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