Central Valley

Bargain hunters start to snap up homes as prices return

Northern San Joaquin Valley home sale prices plunged again in February, dropping to levels not seen since early 2004.

But for the first time in many months, real estate brokers are practically giddy with enthusiasm over jumps in pending sales and prospective buyers.

First the bad news: Median home sale prices fell to $225,000 last month in Merced County. That was $95,000 below February 2007 and $9.750 less than what homes sold for January.

The sales statistics, from DataQuick Information Systems, show some communities have been hit harder than others.

Home prices dropped most in Atwater (down 35.1 percent) and Los Banos (down 35.6 percent).

Now the good news:

"The number of homes being sold is increasing substantially," said Mike Zagaris, president of PMZ Real Estate. "The value of homes that have closed in March compared to February is up 31 percent for us."

Other real estate companies agree business is booming.

"Being in the foreclosure capital of the world is actually starting to be to our benefit because it's made it affordable to buy a home again," said Craig Lewis, president of Prudential California Realty. "Prices have been driven down so much that local residents can afford them."

"Inventory is just starting to shrink," Lewis said. Based on deals in the works, he predicted a surge of sales will close escrow during the next 60 days.

After two years of falling home prices, Zagaris said the increase in sales volume signals that price stabilization is near.

"I believe we've reached the bottom of the market," said Zagaris, who thinks prices will "bounce along the bottom" for a while as the excess inventory of homes for sale clears out.

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