It was the hottest buy in town.
The Cherry Lane Condos had just come on the market in September 2006 as the median resale sale home in Manteca hit $410,000. It was just $3,000 away from the market’s peak.
People were willing pay to $220,000 for 800-quare-foot homes accessed from alleys.
That - and the fact there was almost nothing available under $300,000 - made the conversion of the apartments built in 1985 into condos at Union Road and Cherry Lane look appealing to those desperately trying to buy shelter.
As a result, the condos - typically consisting of 941 square feet with two bedrooms and one bathroom - were fetching just under $220,000. They had started out at $190,000 just months earlier and were rapidly climbing in value.
It is a much different story seven years later.
What was once the hottest residential property in Manteca is now on the bottom of the heap in terms of what they will command in today’s housing market.
The condos that once sold for $233 per square foot go begging today at as little as $58.07 per square foot or $54,652. Even so that is a vast improvement over then the condos that hit the bottom of the market at $37,169 or $39.50 per square foot in March of 2012. Currently, the overall median asking price for existing housing for sale in Manteca is $117 per square foot. That’s an 18.2 percent increase over the past year. By comparison the average price of the condos has bounced back up 12.68 percent during the same time period.
There are nine units are being offered for that sale ranging from $54,642 to $170,905. The seven condos repossessed by banks range in price from $54,662 to $73,808. There are two that have received notices of default are trying to sell for $160,000 and $170,905. The lowest asking price represents a decline of 75.15 percent from the market peak. Compare that to the lowest asking price in March of 2012 that reflected an 83.14 percent drop from the top of the market.
The Cherry Lane condo sellers have been the most realistic since the housing bubble burst. In 2008, they quickly dropped to $60,000 - a drop twice as sharp as conventional housing - promoting a flurry of sales.
They appeared to have hit bottom in January of 2010 when units that sold closed escrow for $44,900. At that point the condos had plunged 78.6 in value over four years compared to overall housing values in Manteca that had dropped 57 percent during the same time going from $413,000 to $178,000.
A 30-year loan for $55,000 plus annual taxes and insurance would translate into $338 a month for a condo. That sounds great but there are only two big problems: You can’t get a FHA loan for them since the complex is more than 50 percent investor owned. And as for investors, they have to put a substantial amount down.
But even if someone puts up $55,000 in cash or a combination of a loan and down payment, the units are renting for excess of $700 providing $8,400 in cash a year making them appealing to investors. That’s because a straight 5 percent return on $55,000 would generate around $2,750.
To contact Dennis Wyatt, e-mail email@example.com