All value gained – and then some – in the past 12 years for Manteca resale homes based on median price at the close of escrow is gone.

There were 633 existing home sales with a median selling price of $180,450 in 1999. That compared with 1,205 home sales with a median price of $176,625 in 2009.

The year 1998 was when the resale market lurched forward with sales doubling and value going up by roughly 30 percent over the previous year of 1998 when 259 homes sold with a median value of $131,000. It was also when the median price for the 243 single family homes built that year sold was $177,000 or just  $375 more than what the median price of an existing home sold for in 2009.

“The fairly quick turnover of foreclosed homes shows the American Dream of owning a home is still alive,” noted Realtor Tom Wilson.

Wilson, though, mirrors the astonishment expressed by some economists about the next surge in foreclosures. Most of the so-called liar loans as well as low introductory mortgages have either worked their way through the system or else are at some point in the foreclosure process. What is expected to come next, though, are homeowners who can no longer handle credit line payments and other second mortgage instruments due to either a reduction in income, a loss of jobs, the elimination of bonuses, or simply overextending themselves beyond what they could handle.

Back in the high rolling times of five years ago, such borrowers simply refinanced their homes as the median value of existing homes shot up in Manteca by more than 125 percent from 1998 to 2006 when it peaked at $413,000.

Realtors are now citing cases of people who bought their homes in the mid-1990s when prices were lower than they are today who are now losing their homes because they over leveraged homes with debt as equity grew.

Agents also have noted that hardly any clients any more say they’re waiting to see if prices fall further. For whatever reason median prices have been holding steady between $175,000 and $179,900 since April after dropping by $5,000 a month through much of 2008 and almost twice that per month in late 2007 and early 2008.

Even with more foreclosures on the way, Wilson and others don’t see any major price drops.

Wilson believes that many homes are at the point now that they are undervalued when they sell. By that he means they are selling more than the cost it would take to build them today. He attributes part of that to out-of-area real estate firms that are sometimes not even in California representing the interest of banks. They are setting prices on the Modesto-Stockton median without understanding Manteca and Ripon are sub-markets that are performing better than the whole.

That explains why a home that is 10 years old and in good shape with more square footage will sometimes sell more than a home four times its age with less square footage and no modern upgrades.

Wilson predicts that sometime in the next few years the market will make an upward adjustment for homes that are selling below value. However, he cautioned that doesn’t mean overall prices will rise. It’s just that some homes are being sold for a significant amount less than they are worth even in today’s market and sooner or later they will have to reflect their lost value when they go to sell even if the overall market hasn’t increased in price.

A record 1,205 existing homes sold in Manteca in 2009 eclipsing the previous record set in 2008 by 40 homes. Altogether 2,370 existing homes changed hands in Manteca in the past two years or one out of every 10 housing units.

It took Manteca from 1988 to mid-1999 to sell that many homes.