First-time buyers can get Central Valley homes cheaply

Home prices are plummeting and foreclosures may be piling up, but the worst real estate downturn in decades is a godsend for certain people who traditionally are shut out of the market: first-time homebuyers.

One of them is Nohemi Gutierrez of Fresno. The best part? "Our house payment will be $15 less than our rent," she said.

Harold Penner of Guarantee Real Estate said he's sold four houses in the last two weeks to first-timers. "It is amazing how many are in that category," he said.

First-timers are defined as buyers who haven't owned a primary residence in three years. That could be a recently married couple with kids in tow to a retiree looking for a small house.

No local statistics are available, but interviews with agents suggest that many, if not most, of the buyers now hunting for homes are first-timers.

Statewide, they made up 36% of the market this year, up from 30.4% in 2007, the California Association of Realtors said. Agents say the percentages likely are higher in the central San Joaquin Valley, where prices have fallen to 2003 levels. First-timers are snapping up bank-owned properties at a rapid clip.

"They are snatching them up because banks are taking whatever they can get," said Guy Willis, a loan officer at Guarantee Home Loans. He said 90% of the foreclosure sales he finances are to first-time homebuyers.

The median house price last month was $160,000 in Fresno, Clovis and Fresno County. That compares with $246,500 in November 2007 -- and more than $300,000 the year before.

And that's why Gutierrez just signed loan documents to buy her first house, a four-bedroom, 7-year-old foreclosure near Jensen and Clovis avenues.

"We looked two years ago, but prices were way out of our price range," she said. "We stopped, didn't look any more and kept on renting."

But that changed a few weeks ago when her father, Alberto, encouraged her to look again.

"We saw prices go down and my dad was a big motivator," she said.

Gutierrez liked the first possibility real estate agent Michelle Ennis showed her, a house for $150,000 that would have cost $350,000 new. The down payment was only $5,000, or 3%, because the buyers used an FHA loan.

It was in good shape for a foreclosure. "It needs a couple minor things, like lights and window blinds," Gutierrez said.

Danielle Christensen also is buying her first home. The 35-year-old Fresno woman originally hoped to use a city-sponsored first-time homebuyer-assistance program, but it ran out of money.

However, prices fell so much she didn't need it. She also found an active market; seven houses had competing offers that beat her out. Her eighth offer was accepted; she's buying a three-bedroom, two-bath, 1,388-square-foot bank-owned house for about $120,000.

Christensen said she is excited and scared at the same time.

"Until escrow is completely done, it's kind of scary," she said. "It's money that I have out and I have no control over. But just having my own place that I know is mine and that my stuff is in ... I want to go home knowing it is completely mine."

Christensen said she looks forward to buying a washer and dryer, and to having a covered garage.

Don Scordino, president of the Fresno Association of Realtors, said first-time homebuyers are crucial to a balanced market. "These are new beginnings," he said. "It strengthens the foundation out there."