Sales of existing houses in Manteca continues at record volume levels thanks to unprecedented affordability with prices reflecting the mid-1990s.
Unfortunately, it is not opening a floodgate of homeownership by buyers who occupy the homes. The majority of homes now being sold – based on a survey of four different Manteca real estate offices – are going to investors.
It has prompted some real estate professionals as well as city leaders to start worrying whether Manteca is headed toward having too many rentals.
“Manteca is in danger of becoming a city of rentals,” said Carol Bragan of Bragan Realty. “Don’t get me wrong. We need rentals but it is getting harder and harder for first-time buyers to find a home.”
That’s because all cash buyers – many who are people with money tucked away in bank certificates of deposits that are getting near record low interest rates - are cashing them out and putting their money to work in rental housing. They often end up having a positive cash flow out of the gate.
There have been 2,069 existing homes sold in the past 21 months or the equivalent of one out of every nine housing units in Manteca. There was a record 1,165 existing homes sold in 2008. This year, 904 homes have sold through Sept. 28. If the current pace of sales holds, there will be a new record for resales in Manteca when 2009 ends with 1,183 units sold.
Starting about six years ago, local buyers who lived and worked in Manteca were effectively squeezed out of the housing market due to a flood of Bay Area buyers. The return of prices to earth thanks to foreclosures triggered by the mortgage mess at first turned it into a promised era for first-time local buyers but then investors shifted into overdrive.
Manteca Mayor Willie Weatherford believes the time has come for the city to re-examine how it is helping working class families struggling to secure their own home. Even though the city is making redevelopment agency funds and federal neighborhood stabilization money available to help with down payments, the residents who have qualified for the help are running into the same problems that those who are trying to buy using FHA loans. They’re getting trumped by investors.
Some cities – such as Stockton – go out and buy the homes with cash, fix them up and then sell them to qualified buyers.
The mayor noted that the recommendations of the council appointed affordable housing committee that was sidelined after prices started dropping should be dusted off and considered for possible implementation during the next wave of development.
Officials decided at the time that such help wasn’t needed as the market was adjusting itself. It was effective – for awhile –in helping first-time buyers qualify for homes. About two years ago, 90 percent of the buyers were those who were purchasing their own home for the first time and were from the Northern San Joaquin Valley. Now Realtors say easily more than 50 percent of all existing home sales are being driven by investors.
Steve Roland of Roland Group Real Estate said it is still possible for first-time buyers to get into their own home but that it requires patience and being aggressive.
Bragan agrees, but noted many people after looking for months and getting beaten out by investors can often get discouraged.
Unfortunately, it is not opening a floodgate of homeownership by buyers who occupy the homes. The majority of homes now being sold – based on a survey of four different Manteca real estate offices – are going to investors.
It has prompted some real estate professionals as well as city leaders to start worrying whether Manteca is headed toward having too many rentals.
“Manteca is in danger of becoming a city of rentals,” said Carol Bragan of Bragan Realty. “Don’t get me wrong. We need rentals but it is getting harder and harder for first-time buyers to find a home.”
That’s because all cash buyers – many who are people with money tucked away in bank certificates of deposits that are getting near record low interest rates - are cashing them out and putting their money to work in rental housing. They often end up having a positive cash flow out of the gate.
There have been 2,069 existing homes sold in the past 21 months or the equivalent of one out of every nine housing units in Manteca. There was a record 1,165 existing homes sold in 2008. This year, 904 homes have sold through Sept. 28. If the current pace of sales holds, there will be a new record for resales in Manteca when 2009 ends with 1,183 units sold.
Starting about six years ago, local buyers who lived and worked in Manteca were effectively squeezed out of the housing market due to a flood of Bay Area buyers. The return of prices to earth thanks to foreclosures triggered by the mortgage mess at first turned it into a promised era for first-time local buyers but then investors shifted into overdrive.
Manteca Mayor Willie Weatherford believes the time has come for the city to re-examine how it is helping working class families struggling to secure their own home. Even though the city is making redevelopment agency funds and federal neighborhood stabilization money available to help with down payments, the residents who have qualified for the help are running into the same problems that those who are trying to buy using FHA loans. They’re getting trumped by investors.
Some cities – such as Stockton – go out and buy the homes with cash, fix them up and then sell them to qualified buyers.
The mayor noted that the recommendations of the council appointed affordable housing committee that was sidelined after prices started dropping should be dusted off and considered for possible implementation during the next wave of development.
Officials decided at the time that such help wasn’t needed as the market was adjusting itself. It was effective – for awhile –in helping first-time buyers qualify for homes. About two years ago, 90 percent of the buyers were those who were purchasing their own home for the first time and were from the Northern San Joaquin Valley. Now Realtors say easily more than 50 percent of all existing home sales are being driven by investors.
Steve Roland of Roland Group Real Estate said it is still possible for first-time buyers to get into their own home but that it requires patience and being aggressive.
Bragan agrees, but noted many people after looking for months and getting beaten out by investors can often get discouraged.
