State

Home sales prices on upward swing

Stanislaus County home sales prices rose for the second straight month in June, jumping $4,000 to a median $139,000.

That's the first two-month rise since the housing market began crashing 3½ years ago.

"There was an overcorrection on the way down, just like there was when prices were going up," said Craig Lewis, president of Prudential California Realty. "We've hit the bottom. I don't think prices will move up rapidly, but they'll rise slow and steady now."

Credit a classic case of supply and demand.

"There are plenty of buyers at these prices, but not enough homes," explained Lewis, who said his 300 agents sold a record number of houses during the last year.

Any house in decent condition priced less than $250,000 is getting multiple purchase offers. Some homes have more than 40 people competing to buy.

That competition is pushing up values.

Though prices rose 3 percent in June, there's a long way to go before most homeowners will be happy. The median price paid for a Stani- slaus home was $396,000 in December 2005.

Virtually every home purchased since 2001 is worth less now than it was then.

The same is true in Merced and San Joaquin counties.

According to statistics released Thursday by MDA DataQuick, median-priced homes in Merced sold for $110,000 in June, up $5,000 from May. San Joaquin homes sold for a median $152,000 in June, which was the same as May but up $6,500 from April.

Northern San Joaquin Valley home values have fallen further than about any other region in America, and prices have been recovering more slowly.

Statewide, for example, the median-priced home sold for $246,000 in June, up 7 percent from May. Bay Area homes rose 3 percent to $352,000.

Just as it did a decade ago, the hefty difference between Northern San Joaquin Valley home prices and those elsewhere in California is attracting buyers to Stanislaus, San Joaquin and Merced counties.

"There are lots and lots of investors buying here. They think it is the time to get into the market," said Chad Costa, a Re/Max Executive agent in Modesto who sold 500 homes last year.

Stiff competition

Costa said investors making all-cash offers are tough for first-time buyers to compete with because they don't have to convince lenders or appraisers that homes are worth what they're willing to pay.

Home values are changing so frequently that appraised values can vary dramatically, and lenders won't issue loans for more than what their appraiser determines a home is worth.

"If you get five appraisers, you're going to get five different values," said Costa, noting how frustrating that can be for buyers trying to close a deal.

Another big problem with the current market, Costa said, is that many vacant, foreclosed properties haven't been put up for sale yet. Many bank-owned homes sit empty for months without any attempt to find a buyer.

'Don't give up hope'

But that's starting to change.

Costa lists foreclosed properties for 30 banks, and he said those listings are increasing. Recently he has been listing two or three bank-owned homes for sale each day, which he said should help meet pent-up buyer demand.

"Don't give up hope," Costa advised buyers. "There's going to be plenty of homes on the market in the next three to six months. The market is going to balance itself out."

There certainly are plenty of homes in the process of being foreclosed on to quench buyers' thirst.

During June alone, 749 Stanislaus homes were lost to foreclosure and more than 1,000 additional homeowners were told their homes are in jeopardy of foreclosure unless they catch up on delinquent mortgage payments.

Nearly 14 percent of all Stanislaus homeowners with mortgages are 90 days or more behind on payments.

For the last couple of years, nearly all of the used homes sold in Stanislaus have been foreclosed properties or those at risk of being foreclosed on.

But that, too, is changing.

Increasing numbers of homeowners who aren't in mortgage trouble are choosing to sell their current homes so they can buy elsewhere.

"It's a secret in the real estate business: The very best time to buy a move-up home is during a down market like this," Lewis said.

Here's why: Even though homeowners must sell their current homes for relatively low prices, they may get even bigger bargains buying their next homes.

"For higher-priced houses (such as those listed at more than $300,000), there's more inventory to choose from and less competition to buy," Lewis said. "People are starting to see that. The last 60 days we've started to see traditional sellers putting their homes on the market."

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

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