The Dow Jones Industrial Average closed above 3,000 points for the first time ever.
The Soviet Union dissolved. The United States liberated Kuwait. Manteca had 41,500 residents. And it was back then – 1991 – when you could last buy a home in Mayor’s Park for $127,000.
“They may be fixer uppers for that price, but homes are closing for $127,000 in Mayor’s Park today,” noted long-time Realtor Tom Wilson.
Two homes that closed escrow in Mayors Park last month were three bedroom, two bathroom homes of 1,338 and 1,537 square feet at 734 and 752 Oliver Way. They sold for $130,000 apiece.
Drawing parallels to the lower end of today’s market to 1991 when a Mayor’s Park home in the triangle formed by Louise Avenue, Union Road, and the railroad tracks was actually at the median price is what a number of real estate agents are doing today in Manteca. Median prices are still much higher as they are at $179,900 today on the resale market compared to $125,900 in 1991. But in terms of what the dollar can buy it hasn’t been better.
“This is first and foremost the best opportunity for first-time homebuyers even without the $8,000 tax credit,” Wilson said. “I believe we’ve been bouncing around the bottom for a little while now. I think 2010 is when we’re going to look back on 2008 and 2009 and say to ourselves ‘we should have bought out first home’ or ‘we should have bought a move-up house’.”
Wilson, and others, are comparing 2009 to 1998. That is when Manteca entered the year with a standing inventory of 344 resale homes. By May of 1998 the inventory had dropped to 304 as the foundation was being laid for a rebounding market in subsequent years.
As of Monday, there were 201 resale homes available in Manteca, down from 376 at the start of 2008. That number is substantially below the historic peak of 651 unsold homes that were lingering in Manteca back in September of 2007.
That reflects a 43 percent drop of standing inventory in Manteca in just four months.
Resale homes closing escrow have reached 400 as of April 27. That is just two shy of what was sold in all of 2007 in Manteca. If the sales pace continues, 1,200 existing homes will have changed hands by year’s end to eclipse the resale record of 1,165 homes sold in 2007.
“Things are starting to move,” noted Carol Bragan of Bragan Realty.
Bragan noted that there isn’t a lot of inventory in the $140,000 and under where the bulk of the selling activity is now taking place.
Bragan added that any uptick in prices when they occur will start eliminating potential buyers.
“Buyers and agents have to be pretty aggressive,” she said.
Bragan, like other agents, has clients who are struggling to secure a home even though they are qualified. The problem is the number of people who are flooding the market to buy whether it is first-time buyers are investors.
Bragan, Wilson and others agree you won’t be seeing price increases in the near future but eventually they’ll come back.
“You won’t see what we saw recently because banks aren’t going to make those types of loans anymore,” noted Deborah Romero of Ability Mortgage.
The loan officer pointed out the good news is that between existing and resale homes in Manteca there were almost 1,400 mortgages issued which means there were 1,400 households with solid credit, solid income, and solid payment habits. Contrast that to two years ago when there were 1,200 homes sold mostly to people who overstated income, had artificially low introductory rates the first two years, had deferred interest clauses or what are collectively called liar loans.
“It’s putting us on a much more stable (foundation),” Romero said.
Wilson noted the market is also ideal for people who have thought about moving up into a larger house and have been in their home for a long time.
“They can convert their home to a rental and get a larger house,” Wilson said. “The price and rates are never going to get better.”
A home with 4336 square feet with seven bedrooms and four bathrooms closed escrow at 736 Vasconcellos Avenue in the Heritage Ranch neighborhood near Joshua Cowell School for $310,000 on April 9. With 10 percent down at a 5 percent fixed rate 30 year loan that would translate into $1,778 a month payment including property taxes and mortgage insurance.
The same model topped at $750,000 three years ago.
Wilson said what may even be better for such a move-up buyer are new homes.
“Builders are getting real aggressive now (plus the state is) giving you a $10,000 tax credit to buy a (brand) new home,” Wilson said.