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2009 wages & 1997 prices
This home at 1030 Junction Boulevard will soon be available through Jim Muthart of Coldwell Banker Crossroads Real Estate. - photo by DENNIS WYATT
The South County real estate market is beginning to look more and more like a bad sequel to the 1963 treasure hunt farce entitled “It’s a Mad, Mad, Mad, Mad, World.”

Jim Muthart of Coldwell Banker Real Estate (209-602-8593) has two foreclosures getting ready to come on to the market. The final listing prices haven’t been set but already he’s got offers on both. One is a four bedroom, two bathroom two-story home built in 1997 at 1030 Junction Drive within walking distance of Sierra High and across the street from Robert Estates Park and the other is at 318 Center Street.

The one on Junction Boulevard in all likelihood will end up being put on the market for around $170,000 when all is said and done.

The home sold originally in April 1997 for $164,500. It then sold in February 2002 for $260,000 and then in May of 2007 for $449,000.

Is the ballpark of around $170,000 a way to get interested in the home to bid it up? The short answer: Not exactly.

The market today is being driven by FHA loans. There are limits to what can be done due to the perimeters of mortgage insurance and general rules.

The odds are the home will end up with a number of offers. Will it go to the highest offer? It depends.

If there is a cash offer, it could go for a lot less than the highest offer especially if there are no buyers trying to purchase with conventional loans.

There isn’t much fudging these days with appraisals. A FHA buyer could pay above the appraisal amount but they’d have to come up with the difference out of their own pocket. Since most FHA buyers don’t have a lot of cash – they typically come up with 3.5 per cent down – the odds of that happening are virtually nil.

Perhaps the seller rejects all offers and decides they can just wait a month or two and try again. The problem is if they are dealing with FHA mortgages, once an appraisal is made it is assigned an FHA code that is tied to the property keeping that appraised price as the gospel for FHA underwriting for six months.

You’ll find conventional lenders playing it close to the vest as well.
That makes every offer unique not just on the basis of the amount offered but how the buyer intends to pay for the home.

Prices are bouncing up slightly on some homes – those that are the most in demand such as three or found bedrooms with two or more baths – while two bedroom, one bathroom homes and McMansions are dropping as well as specialty properties such as condos and patio homes. Are the current increases and drops great, no?

There certainly aren’t many people who are serious about buying a home who are waiting. The Junction Boulevard home is a prime example why. Buyers have 2009 wages while the homes they are looking at are at 1997 prices.

“It’s all about the math,” Muthart said.

You’ll also be hard-pressed to find very many buyers willing to go to the max that they qualify for under a loan.

Even so, Muthart noted people who bought on the way down – such as 18 months ago – aren’t upset with their decision.

“As long as they’re comfortable with the payment,” Muthart said.

He noted many of those buyers are looking at the market today and are patting themselves on the back for buying 18 months ago when they had a bigger selection, could take their sweet time, and could find a home and neighborhood to their likening without having to worry about multiple offers.

And just when you didn’t think it couldn’t get any stranger, Muthart and other agents are discovering that in Wetson Ranch – which is part of the City of Stockton – buyers are competing against that city to buy homes.

Stockton, using the Obama Administration money designed to help save neighborhoods under duress, is bidding against qualified buyers trying to secure affordable housing. Originally the city said they’d go after fixer uppers but as Muthart noted that is not the case as the home he has listed in Weston Ranch is in move-in condition.