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$235,000 in Manteca 7 years ago bought a small house on an alley
Seven years ago $235,000 would buy a home on an alley like this 528-square-foot house if you were lucky enough to be the first to have an offer accepted. - photo by Photo Contributed

Spend $235,000 today to buy a home in Manteca and you can get a new home of about 1,500 square feet with the latest built-in energy efficiencies.

Or you could take that same money and buy 2,700-square-foot or larger home on the resale market that’s loaded with upgrades and comes with a 6,000 square foot or larger lot.

Seven years ago $235,000 would have bought you a 528-square-foot one bedroom home on a 4,993-square-foot lot with a carport located off an alley. And that’s if you were lucky enough to be the first buyer to make an offer.

Despite all of the negative downsides of the housing bubble bursting, there is one overwhelming positive byproduct. And that’s affordability.

You have to go back at least 40 years - if not longer - to find a point of time in Manteca where housing is affordable as it is today when it comes to buying.

Renting is another issue as a round of increases in the past 8 months is sending rent payments upward now to the point it costs more to rent comparable homes than to buy them on a monthly cost basis.

What happened from 2002 to 2007 with housing prices was not sustainable. Each upward surge in prices cut more and more people out of the housing market in Manteca whether it was buying or renting.

And it was not good for the local economy.

Housing - which is the highest single item in the household budget for a buyer or renter - is no longer pushing 40 percent of gross income. Most buyers and renters are down in the low to mid 20 percent range in terms of housing costs to overall gross income.

That isn’t translating into a frenzy of consumer spending.

All you have to do look at the majority of homes entering foreclosure now in Manteca to understand why. In May, almost 70 percent of the homes in the process of being taken back by lenders have secondary loans in default. That meant the buyer used their houses as ATMs to augment their available consumer spending cash.

The difference today is very few people use their homes as a consumer line of credit for toys and such while most pay cash or use unsecured debt mechanisms such as credit cards to make purchases.