Bay Area housing prices may once again impact future trends in Manteca values.
This time around, though, it is a whole new game.
In past periods of basically flat markets or markets on the grow, any price movements in the high-priced Bay Area would move up with Manteca lagging about six months behind. As more Bay Area first-time buyers were squeezed out of the market due to price increases, they’d head to the east – and ultimately over the Altamont Pass – where prices typically drop each mile farther away from San Jose and San Francisco.
Manteca and other Northern San Joaquin Valley communities basically became the de facto affordable housing solution for the Bay Area where incomes are substantially higher.
The next trend, though, won’t be driven by first-time buyers. Instead, experts anticipate that investors – who believe price bounce backs in the traditionally high-priced Bay Area market, will come quicker and in larger gains this time around – will step up their drive to snap up properties.
That ultimately would make Manteca, Tracy, Lathrop, and Ripon even more appealing to investors than they are at the moment.
However, the “next trend” may not happen in a month or even a year or two. There are several reasons. The economy is still shaky although the “real experts” say it has bottomed out. Job grow just barely above flat line status won’t help. Then there are the wild cards. They are the $8,000 federal home buyer’s tax credit ending April 30, the looming March 31 deadline that ends the Federal Reserve’s authorization to buy mortgage-backed securities, and the anticipation that interest rate will increase sooner instead of later.
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Another anticipated trend is based on an observation made by the late Spencer Auch who was a longtime partner with Bev Housden in Coldwell Banker Crossroads Real Estate involves how resilient the Manteca market is in a recession.
Auch made an astute observation about how the Manteca market retreated and advanced prior to and after previous recessions. Back in 1990, prices retreated hard because the core of the Bay Area jobs that Northern San Joaquin Valley commuters went to were in San Jose. The next economic slowdown about a dozen years later wasn’t as harsh on prices and the market as the closer Dublin-Pleasanton had emerged as a major employment center.
The bounce back this time around may not be less severe than the last but it is true that the closer Manteca is to jobs, the sooner prices will come back up.