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Housing: The end is coming
This home at 794 Wawona St. in Manteca offers 2,020 square feet of living space with four bedrooms and three bathrooms for $185,900 - photo by DENNIS WYATT

Don’t look now but the clock is ticking on the most affordable housing era in post World War II Manteca history.

Just like the housing bubble came to an end so well the days of 3.5 percent down loans, mortgage rates hovering around 5 percent, as well as the $8,000 federal tax credit for first-time buyers and $6,500 tax credit for all other buyers of a primary residence.

Prices may go stagnant for the next year or so but it won’t matter. The days of a house costing less to buy than it does to build is starting to slip away in Manteca.

Consider the following:

• Congress is now considering a bill that would raise the FHA down payment from 3.5 percent back to 5 percent just like it was in the 1990s.

• The tax credits come to an end on April 30 for anyone who does not have a house in escrow by then.

• The guns and butter push of the Obama Administration will cause key bond markets to react the same as they did when LBJ escalated the Vietnam War while pushing the expensive agenda of The Great Society. That means interest rates will rise.

How does this impact a home purchase? Take the listing at 794 Wawona St. with four bedrooms and three bathrooms with 2,020 square feet of living space listed for $185,900.

Currently, an FHA loan down payment of 3.5 percent means coming up with $6,506. You’ll need $2,769 more if it goes to 5 percent. That doesn’t also include a proposal on reducing the amount the sellers can cover in the closing costs by half. Jettison the $8,000 tax credit and by May it could cost you $10,769 more to buy the Wawona home.

What if interest rates go up a full percent to 6 percent which is still pretty low rate by historic measures? It would add $103 a month to the cost of the house payment. Overall by the time 30 years go by on a 30-year fixed rate loan that house is going to cost $47,769 more without it increasing in price.

More important, you’ve got to stop listening to the national housing trend stories. Manteca is part of one of the most expensive markets in the land. Housing prices – thank goodness – aren’t likely to go farther south as they are in Detroit. And when value starts going up again, Manteca will still be a lot more expensive than Alabama, Iowa, or South Carolina. Thatis why you need to base your home buying decision – if that is what you want to do – on the market in Manteca and not in Kankakee.

Why else do you think investors are still snapping up homes as rentals or to flip them in a couple of years? They’re not gambling as the flippers of a few years back were. They are investing to get a decent return.

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PRICE COMPARISION: The $185,900 price tag on the 2,020-square-foot home at 794 Wawona that has four bedrooms and three bathrooms gives an indication of just how affordable Manteca housing is at the moment.

Similar houses in the neighborhood sold for as much as $480,000 just over three years ago.

But what really counts is what $185,900 will buy. Two years ago, that amount of money bought a two bedroom, one bathroom home with 995 square feet. Four years ago it bought you nothing in Manteca unless it was in a mobile home park that comes with a $400 to $500 a month space rent.