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Count your blessings you’re in Manteca and not Cleveland

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POSTED January 16, 2009 9:58 p.m.
Manteca may be at the epicenter of the foreclosure meltdown triggered by liar loans and fueled by greed, but we’re still enjoying the good life.

Consider the following if you believe otherwise:

• There are 18 homes for sale for under $3,000 in Flint, Mich.

• There are 22 homes for sale for under $3,000 in Indianapolis.

• There are 46 homes for sale for under $3,000 in Cleveland.

• There are 709 homes for sale for under $3,000 in Detroit.

These are not tear downs but they do need work. One Detroit home listed through Century 21 Villa has 1,000 square feet with three bedrooms and one bathroom for $500. That’s right $500. The real estate firm estimates it will cost upwards of $20,000 to do necessary rehabilitation work inside the home. The house sold for $72,000 in late 2007.

Only two homes have sold for less than $60,000 in Manteca during the last four months in Manteca. One was for $54,000 for a three bedroom, one bathroom home with 1,372 square feet at 137 S. Willow Ave. The other was a $52,000 deal for a three bedroom, one bathroom home with 992 square feet at 312 S. Poplar Ave.

 Stockton-Manteca-Modesto was among the very first regions to feel the impacts of loose lending standards. This area led the nation for more months than anyone else when it came to foreclosures.  It is also expected to be the first to pull out of it. The reason why the region was first going into the mess and will be the first coming out is due to growth.

The worst is either over or close to it in Manteca. That doesn’t mean there won’t be more foreclosures — there will be. It doesn’t mean prices are going to start climbing again any time soon nor does it mean that retail is going to bounce back overnight.

We took a huge punch in the gut of the economy — housing — but we’re getting up for the next round and are still a strong contender. That’s not the case elsewhere.

That, of course is of little comfort to those struggling right now with job loss, reduced hours or reeling from the ripple effect of slowing retail sales that are sparing no one including government.

Letting fear guide most of us, though, is just plain silly and shortsighted.

The tight credit market is not because banks don’t want to lend capital. They do. If they don’t lend money, they don’t make money. Regional banks such as Bank of Stockton are still doing a robust loan business. The problem comes with the big guys who essentially wanted in on the action when zero down mortgages and liar loans starting revving up the housing market even more. They loosened their underwriting standards to stay in the game and got burned.

Banks — rightfully so — are taking a bit of a breather to get their house in order and are moving forward more cautiously. That is having a drag specially among potential home buyers — including many in Manteca — who are frustrated as lenders take longer and longer to approve despite solid credit scores and income.

That, however, should be comforting news to all of us including those trying to buy homes.

We need a return to solid basics in our economy. You don’t borrow more money than you can afford to repay. You don’t lend more money than someone can afford to repay. You don’t live beyond your means. You don’t abandon solid business principles in order to chase more profit potential.  

The suffering and economic retraction will be for naught if we don’t get back to basics, reassess and restructure what we what expect government to do, and if we fail to look forward at the same time.

The economy doesn’t justify throwing good development policies out the window or to let people get by on the cheap. It may require rethinking how things are done in a bid to reduce costs and  increase efficiency.

What Manteca Unified and the City of Manteca are going through with scaling back is good. It makes you look at how you do business and compare that to your objectives – short and long range — as well as the ability to pay for things.

Ideally, the lessons of 2008 and 2009 won’t be allowed to go to the wayside when the day returns for the economy to pull out of the station once again. That way the economy’s strength — as well as government, our own individual house of finance, and the retail sector — will be all muscle and not merely layer of layer of fat that ultimately will lead to another bout of severe economic illness.
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