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The proverbial light at tunnels end?
There is only a large enough supply of homes Manteca to satisfy the current buying pace of 121 homes a month for the next six weeks.

Of course, not everyone can afford the McMansions still selling for around $320,000 or may not want to buy some of the homes given their condition that are out there for $79,000.

As of Monday the 188 homes available in Manteca included 44 foreclosures and 83 short sales. The rest of the homes for sale are not under duress. There are also 220 pending sales in the works. No one is dancing in the street but this is the latest in a series of signs that we are at the start of an earnest, steady housing recovery.

It is true that more foreclosures are coming but there are also a lot of buyers chomping at the bit to take advantage of the lowest prices in a generation made all the sweeter by the lowest interest rates in decades plus the deal sealer – the $8,000 federal tax credit.

Sellers, of course, are waiting for a real jump in prices and not one simply fed by starting property at a below market price and having people literally bid it up. That won’t happen any time soon judging by the rebound for the 1989 to 1991 market decline that was considerably less painful. After median prices retreated from a peak of $135,900 in 1989 down to $125,900 by 1991 they stayed there until 1997. The dynamics were different but they do reflect a constant for the period following a severe drop in prices in that prices essentially remain stagnant.

Sellers have to be realistic and make plans based on new realties.

Buyers – and those actively in the hunt understand it – have to be aggressive due to the number of potential buyers versus the inventory.
No one has a crystal ball but there are signs out there that we are on the bottom although there may be short little spikes and drops in prices.

If you don’t think that the rest of 2008 isn’t going to be an aggressive market, consider this: The federal tax credit ultimately makes every house more affordable by up to $8,000.    

What it does is put $8,000 in cash in the hands of the buyer who can go out and buy new windows, put on a new roof, make other home improvements or simply use the money for other needs. Or they can simply replace the money they used for the down payment and closing costs.

That is why the tax credit is a double punch. It encourages people to buy and basically gives them the money needed to make homes livable while buying at prices that are lower than rent.

The fact the house that you buy in order to qualify for the federal tax credit must be in escrow by Dec. 1 means there are just 30 weeks left.

That will be more than enough of an incentive to keep buyer interest strong as the next wave of foreclosures start hitting.

And – if everything works according to the government’s plan – the bulk of the foreclosures will have been repurchased by year’s end to coincide with just about the three-year mark of when the last liar loan was processed.