What housing is the hottest Manteca based on increases in the price of closed escrows?
Believe it or not, it’s the Cherry Lane condos on North Union Road and the stand-alone townhouse-style Golf Villa homes across the street often classified as condos in many recaps of market transactions.
One 944-square-foot, two bedroom, one bathroom Cherry Lane unit that sold at foreclosure seven years ago for $37,200 closed escrow in November for $75,000 as did two copycat condos in the same complex. That’s just a tad over a 100 percent jump in price. That is nowhere near the top price a Cherry Lane condo fetched in September 2006 when several sold for $219,900. But it does reflect a significant gain for the condos that dropped as much as 83.14 percent in value from the market’s peak by the time they hit rock bottom.
Across the street a three-bedroom, two-bathroom Golf Villa house with 1,316 square feet closed escrow in September for $170,000. That is a floor plan exactly – a Golf Villa that sold for $78,000 at the bottom of the market. Again, similar Golf Villas had fetched in excess of $350,000 before the housing bubble burst. But again, the gain is more than 100 percent better than at market bottom.
Many smaller traditional single family homes have enjoyed similar rebounds approaching 100 percent while many other resale homes are closing in on triple digit gains in value.
The condos would have to increase in value by almost 2.8 times before returning to their historical peak.
They serve well as the proverbial canary in the mine in getting a good read on the health of the housing market.
First, there are a number of units that are exactly the same making price comparisons over the years more consistent.
But more important they are a good barometer because they represent the housing that more people can afford simply because they are consistently the lowest priced.
The condos at Cherry lane were almost impossible to sell for several years. Even when they started moving at fire sale prices due to extensive foreclosures throughout the complex, they rarely were getting more than $45,000 over the first five years following the market peak in 2006 in term of price.
That’s because the glut of foreclosures made traditional three-bedroom, two-bathroom homes affordable to more buyers that at any point in at least the past 50 years.
As supplies started tightening up interest rates crept up a bit, that put traditional homes out of the reach of many buyers.
Sales until recently at Cherry Lane were almost exclusively by investors looking to get an incredibly generous cash flow. In a simple analysis based on rock bottom prices in closed escrow, they were seeing positive cash flows of up to $500 a month assuming they borrowed 80 percent of the cost. Most investors, though, have been cash buyers.