The value of existing Manteca homes rebounded 35.4 percent during 2013 with the median selling price jumping $66,750.
Statistics compiled of homes sold through the Multiple Listing Service of the Central Valley Association of Realtors shows that 991 homes closed escrow within Manteca’s city limits in 2013 with a median value of $255,000. That compares to 1,098 homes exchanging hands in 2012 with a median sales price of $188,250.
The news is good and bad for homeowners. Higher median sales prices means equity is being restored throughout Manteca. At the same time homeowners who are staying put and who had property assessment and consequently tax bills lowered will be in line for higher property taxes in 2014.
Under Proposition 13, property values that were lost could theoretically be regained all in one year plus the two percent annual increments that were not assessed. That means if a home bought in 2006 for $200,000 had its value adjusted downward to $150,000 by 2008 and it stayed there until 2014 when it was valued at $180,000 the assessor can increase the property tax value $30,000 plus 2 percent for the past seven years. That would translate into a $352 jump in the annual property tax bill from $1,500 for the example given although it would still be less than the $2,000 tax bill in 2006. Property tax on most homes in Manteca is one percent of the assessed value.
While home values have taken their sharpest jump in Manteca since 2004, the median home price is still 38 percent or $158,000 below the market peak reached in 2006.
And if you’re expecting 2014 home value gains to match last year’s levels real estate experts indicate you are probably going to be disappointed.
“I sense that 2014 will both elate and disappoint,” noted longtime Manteca Realtor Tom Wilson. “Sellers will be disappointed that prices are not increasing at 2013 rates. Buyers will be disappointed with the increasing interest rates. Both buyers and sellers who act in 2014 will be elated with themselves on their market timing with the great price and great interested rate on their home purchase/sale when they look in the rear view mirror.”
The surging resale market means existing homes and many new homes are near parity in prices making them mutually competitive.
The month-by-month medians price of homes in Manteca during 2012 peaked at $289,000 in September and retreated to $269,950 by December. That reflects a somewhat softening of demand that several Realtors believe is reflected in the fact investors are starting to lose their appetite for some homes as the big cash flow that once attracted them with rock bottom foreclosure prices is starting to fade a bit.
The $289,900 median for September reflects homes closing escrow that entered into purchase contracts in either July or August.
The slowdown in foreclosures broke a string of five consecutive years when more than 1,000 existing homes on the MLS were sold in a year in Manteca.
Annual resale of homes wavered between 400 and 800 a year leading up to when prices peaked in 2006.
There were 991 existing homes sold in 2013 compared to 1,098 in 2012.
The mortgage crisis has resulted in slightly more than one out of every four existing homes in Manteca — 6,718 — being sold since 2008. All of those homes sold for significantly less than the market peak in 2006 when the median closed escrow price for existing homes reached a record $413,000.
That, however, only tells one side of the foreclosure story of people being forced to sell or losing their homes. Realtors note a slight majority of the buyers of the 6,718 homes are people who work and reside in the valley and could only afford to rent in the once red-hot housing market. At the same time, the amount of homes bought by investors has soared.
It is a complete flip of nine years ago when almost all home buyers were coming from the Bay Area in search of affordable housing. There were also few investors buying homes in 2004.
The silver lining of the foreclosure mess that triggered the housing market collapse is affordability. Economists contend housing is affordable when it doesn’t exceed more than 2.5 times an area’s median household income. In Manteca, the median price of a home in 2006 was 7.5 times the median household income. Median household income in Manteca in 2010 based on state Department of Finance figures was $61,315. Median housing prices in 2012 were at $190,000. That translates into housing prices being 4.1 times more than annual income.
Last year, in retrospect, may have been the turning point in the housing recovery.
The least expensive existing home to sell in the Manteca area in 2013 was $65,000 compared to $23,000 for 2012. There were 91 homes last year that sold for more than the 2006 Manteca median price of $413,000. That compares to 15 in 2012. There were seven homes that sold in excess of $413,000 in Manteca during 2011.