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When it costs less to buy than rent youve found the markets bottom
Has the Manteca housing market hit bottom at least under the $180,000 threshold?

The best answer to that can be found by comparing rents and home sale prices.

For all practical purposes any time homes can be bought for less per month using a 3.5 percent down, 30-year fixed FHA loan than a similar home rents for per month you’re definitely in bottom territory.

A week-by-week comparison of properties closing escrow since the first of the year shows there is a slight price creep with the median price of the 131 homes selling so far in 2009 through Feb. 17 at $179,900. Considering that there are 214 pending deals right now in Manteca with a median price of $181,250 you will continue to see an ever so slight creep upwards in the median for the next few months.

The median is simply a statistic to measure how the overall market is doing. Specific properties for whatever reason may still drop significantly while others that are undervalued will increase in bidding wars. When all is said and done, though, the most affordable segment of the market is definitely somewhere on that elusive bottom. Market bottoms are much like the ocean floor. They aren’t smooth. They have dips. They have rises. Given the condition of rents right now in Manteca, you just aren’t going to see a significant drop any more in the bottom half of the housing market.

A prime example can be found on Edward Avenue in the Powers Tract neighborhood sandwiched between Manteca High and Spreckels Park.

A 1,094-square-foot home at 431 Edward Avenue with three bedrooms and a bathroom closed escrow for $70,000 on Feb. 10. If the buyer used a 3.5 percent down fixed 30-year rate FHA loan, the monthly cost including taxes and insurance of owning that home is $480.79. A classified ad in the Manteca Bulletin on Sunday for a kissing cousin of that home on the same street with three bedrooms and one bathroom has a rent of $1,080.

That’s more than double or $600 more to rent than to buy each month. Buying also comes with tax advantages that renting doesn’t.

The home that sold may not have central heat and air but those qualifying for FHA loans can get a fix-it loan for structural issues such as a new roof, dual-pane windows and such as well as heating and cooling systems costing up to $15,000 at the time the home closes escrow.

If the buyer did that they’d get energy efficiency plus new heat and air and have a payment that comes to $565.95 or just over of what it costs to rent.

The best advice for renters is to sit down with a mortgage lender and a real estate agent and explore your options now. You might be surprised.

This market isn’t going to last forever.

Why do you want to be subjected to future rent increases – and they will come – when you can own your own home instead?