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An $11,800 bounce in prices
Condos on way up after dropping 78.6% in value
Prices have bounced back up slightly for the biggest housing bargain in Manteca – Cherry Lane condos. - photo by Bulletin file photo
No category of housing in Manteca has dropped farther in value than the Cherry Lane condos.

The conversion of the apartment complex at Union Road and Cherry Lane five years ago created what was touted as Manteca’s most affordable housing.

At the height of the housing bubble in early 2006, the 941- and 944-square-foot units peaked at $220,000.

A 944-square-foot unit closed escrow on Jan. 21 for $44,900. That represents a 78.6 percent plunge in value over four years compared to the median value of overall resale homes that dropped 57 percent over the same time period going from $413,000 to $178,000. A 941-square-foot unit eight days later closed escrow for $46,200.

The values of the condo have dropped steadily over the past 40 months. They also have gotten to the point FHA loans were no longer possible because of the number of investor owned units. That makes them essentially a 100 percent market transaction unaffected by government subsidized loans or even the $8,000 first-time buyers tax credit save for the rare instances were a first-time buyer has the rest of the cash needed to purchase a unit.

The downward plunge for the condo project may have ended.
Two deals recorded this month have a 944-square-foot unit selling for $56,000 and a 914-square-foot unit closing escrow for $58,000.

That is an upward bounce of $11,800.

Even at $58,000, the units are an investor’s dream. Assume a $200 a month association fee and $750 a month rent payments. $1,000 a year in property taxes and insurance and that is a $500 a month positive cash flow. In a year’s time investing $58,000 has the potential of returning $5,000. That is well in excess of an annual return of 10 percent.

Marge Imfeld of Ability Mortgage is among a growing number of long-time real estate and mortgage experts in the South County who are convinced the proverbial bottom for the lower end of the market has been hit.

“The Cherry Lane condos are a different animal,” Imfeld noted.

The upward bounce for the condos, though, may reflect the realities of the rest of the market.

A year ago, it was common for 15 plus homes in Manteca under $100,000 – excluding the Cherry Lane condo units that may have sold - to close escrow each month. In January the number of sub-$100,000 homes selling has been slashed to six.

There are only eight homes now available in Manteca that are under $100,000.

A year ago this month there were 18 homes in Manteca listed for under $100,000.