Monday, Sep. 01, 2008

Merced property values among worst in nation

By J.N. SBRANTI
The Modesto Bee

Four sets of housing data were released recently, all of which show how badly the Valley home market is doing.

When it comes to home values for existing houses, Merced, San Joaquin and Stanislaus counties are the worst in the nation, according to the government's Office of Federal Housing Enterprise Oversight.

That office's House Price Index, which tracks same-house sales prices and mortgage refinancing over time, calculated that home values dropped 34.5 percent in Merced, 31.7 percent in San Joaquin and 28.5 percent in Stanislaus during the year that ended July 31.

By comparison, homes throughout California lost 15.8 percent of their value and U.S. homes lost 1.7 percent.

Those who bought homes five or more years ago, however, still are doing OK. Since 2003, the federal office calculates that Stanislaus home values are up 15.2 percent, San Joaquin is up 9.5 percent and Merced is up 8.6 percent. California values rose 34.8 percent and national values rose 41.8 percent in the past five years.

A new method for comparing mortgage default rates has been released by First American CoreLogic, a private firm that collects and analyzes mortgage data.

In Stanislaus, 11.7 percent of mortgage loans were 90 days or more delinquent this June. The delinquent rate was 15.2 percent in Merced. Compare that to the 4.1 percent loan delinquency rate for the nation as a whole.

With so many existing homes losing value or in mortgage default, the region's home building industry is suffering.

New housing building permits have plummeted, according to the Construction Industry Research Board.

During the first seven months of 2008, 1,278 building permits were issued in Stanislaus, San Joaquin and Merced counties.

More than seven times that many permits -- 9,202 -- were issued during the same period in 2005, which was the peak of the region's housing boom.

To sell the few homes that have been built during the past year, builders have had to drastically slash prices, new statistics from Hanley Wood Market Intelligence show.

The median new home price plunged to $299,990 in Stanislaus this June. That's a one-year drop of 30.2 percent. Merced prices fell to $279,990, down 12.5 percent, and San Joaquin fell to $328,865, down 29.7 percent.

New home prices statewide were $365,000, down 16.5 percent.

Bee staff writer J.N. Sbranti can be reached at jnsbranti@modbee.com or 578-2196.