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Standing inventory down 75%

New home builders adjust to Manteca market

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POSTED January 27, 2009 1:10 a.m.
It was panic time in September 2007.
Manteca’s housing market had reached the proverbial cliff’s edge.
The number of existing homes available for sale had reached a record 651.
Builders were going full steam ahead even as sales dropped off drastically creating an inventory of nearly 100 unsold homes south of the Highway 120 Bypass promoting Anderson Homes to do what previously was unthinkable and announced they were planning to  auction off 34 new homes to the highest bidders.
Today there are 374 existing homes for sale inside Manteca’s city limits.
And based on a windshield survey of subdivisions south of the Highway 120 Bypass conducted this week by Florsheim Homes chief executive officer Joseph Anfuso, the standing inventory of new homes in various stages of construction has dropped to 27 homes. That represents a drop in standing inventory of almost 75 percent.
Those numbers signal a distinctive shift in the Manteca housing market.
The lower inventory of new homes has essentially eliminated buyers pitting one builder against another to hammer them for the lowest possible price.
It is a good enough sign that Anfuso is re-emphasizing the prediction he made at the start of 2008 – look for the housing market to turn the corner by mid-2009 or shortly thereafter. Anfuso isn’t predicting wild gains in value and prices any time soon but he expects prices will stabilize as buyers grow in numbers.
Anfuso is probably the best positioned builder to compare new homes with the Manteca foreclosure market. All of the new homes Florsheim offers at Valley Park in southwest Manteca can qualify for FHA loans that max out at $353,000 for San Joaquin County.
“I’m sticking by my story,” Anfuso said Monday at the Florsheim neighborhood where homes start at $249,990.
One part of “that story” told in January 2007 was that most of the people buying Valley Park homes would have been drawn to the foreclosure market looking for bargains based on selling price only to end up convinced the best value  could be found in a new home that cost a bit more at escrow.
“You won’t find any dead grass or abandoned homes here.” Anfuso said of the tidy Valley Park neighborhood.
Florsheim marketing director Brian Lange noted that unlike a foreclosure than can have things such as a $10,000 roof, electrical problems, dry rot, falling fences, cosmetic issues, and plumbing needs after escrow closes new homes such as Valley Park have a builder standing behind them.
Anfuso has definite views on what can be done to get housing coming back on a strong foundation. He gave his advice recently to Congressman Joe Baca who sits on the House Banking & Financing Committee chaired by Barney Frank. His advice? Stop trying to save those in over their heads and encourage those who can afford to buy to buy.
Anfuso embraces a move afoot to change the $7,500 tax “loan” for first-time buyers of homes – or those who haven’t owned a home in three years – after April 2008 into an actual $7,500 tax credit.
“Not very many people bit at a $7,500 loan from the federal government even if it was an interest free loans over a number of years,” Anfuso. “A $7,500 tax credit is virtually a down payment on an FFA loan for a $250,000 home.”
The FHA loan program requires 3.5 percent down. The biggest block for many who are qualified to buy isn’t being able to handle the payments but to come up with the down payment especially after the drop in stock prices and such have hit into 401Ks.
Anfuso noted that 37 percent of the loans of struggling mortgage holders had that were modified last year on homes facing foreclosure already have gone into default.
“Demand will come back when you get buyers buying,” Anfuso said.
At the same time, Anufso believes the cities that understand the importance of housing and how it impacts the overall economic vitality of a community and set about to rethink the planning process as well as fees and what level of services they want will end up leading the pack when the recovery hits.
That may also require rethinking what Anfuso calls “densification” or allowing more homes to an acre to reduce the costs of infrastructure such as sewer, water and storm lines per home. He also favors allowing developers to postpone paying growth-related fees until they are ready to request an occupancy permit.
That way builder won’t be crushed with heavy upfront costs that often force them to borrow.
“I’ve always said the city that figures it out first is going to come out of this the strongest,” Anfuso said.
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