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Home prices' falling slows; median price of Merced County homes down to $105,000

Home sales prices continued to slip during March throughout the Northern San Joaquin Valley, but the drop wasn't nearly as steep as it had been during previous months.

The median price in March in Merced County was $105,000, down $500 from February.

Stanislaus County homes sold for a median price of $135,000 in March, down $1,250 from February, according to MDA DataQuick statistics.

Stanislaus prices have fallen nearly 66 percent since the December 2005 housing boom peak when homes went for a median of $396,000.

Stanislaus homes now sell for about what they did during the spring of 2000. In San Joaquin County, the median price was $154,000, down $1,000 from the previous month.

And sales are hot.

DataQuick tracked 933 home sales in Stanislaus last month, most of them foreclosed houses that were resold by banks. In March 2008, by contrast, 527 homes sold. That's a 77 percent increase.

Low prices and low mortgage rates have triggered a buying frenzy and sparked multiple offers for many homes.

"We do not seem to have any shortage of qualified buyers," PMZ Real Estate President Mike Zagaris told a packed luncheon crowd this week during an Appraisal Institute conference in Modesto. "The cost of ownership today is extremely attractive. We're in the window of opportunity for people to get into a house."

But that window doesn't look so attractive to homeowners.

Property values have dropped so dramatically that many people owe more than their homes are worth. Homeowners who are upside-down on their mortgages can't afford to sell their homes to buy newer or bigger homes, so higher-end homes are very difficult to sell.

"I don't think you're going to see a move-up buyers' market until we burn through the foreclosures. I think we're two years away," Zagaris predicted.

To help people buy foreclosures, the federal government this spring is sending about $50 million to the Northern San Joaquin Valley in Neighborhood Stabilization Program funds. That includes more than $8 million for Modesto, which will loan families and investors money for down payments and renovations at very low interest rates.

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

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