Have you considered buying a new home in Modesto?
Good luck trying. No subdivisions are building, and virtually all Modesto home developers have mothballed their projects or sold out.
Only Habitat for Humanity's nonprofit Hope Village has construction plans for 2010, and those houses will be built by volunteers.
That's no surprise considering the dismal housing market. Just 249 home-building permits were issued during 2009 in Stanislaus County, with only 38 in Modesto.
That was a 94 percent drop in home construction from 2005, when Stanislaus' building boom peaked. It's been all downhill from there.
Modesto's last two new subdivisions, Burkshire Estates and Laredo, closed their sales offices and have just a few finished homes waiting to sell.
Burkshire sold 24 homes last year, and its final house is expected to close escrow in a couple of weeks, said Gail Ann Lind, a sales counselor for Standard Pacific Homes. That 100-home tract opened in 2006, just before the housing crash began.
"We sold a lot of homes last year to people who were tired of trying to buy foreclosed homes or short sales," said Lind, noting how time- consuming, frustrating and competitive it can be to buy homes from banks. Burkshire also significantly lowered its prices to attract buyers.
Laredo by Centex slashed prices on its three remain- ing homes, all of which are finished and waiting to be occupied. Example: Its 3,438- square-foot model had a base price of $580,900 in 2006, but now can be purchased for $359,000. That's a 38 percent reduction.
"There's no builder in the valley making a profit these days," said Toby Well, incoming president of the Building Industry Association of Central California. "If you were given the land with curbs, gutters and sidewalks for free, you still couldn't break even building a home."
That's why developers have put new projects on hold.
"Unfortunately, the math is very simple," Wells said. "Builders don't build just for fun."
Standard Pacific still sells homes at Villagio in Turlock, including two this month. One Villagio home, with 2,018 square feet, is priced at $275,000. The same model was $349,990 when the development opened in 2007. The builder also is offering buyers $10,000 toward designer upgrade options.
"Builders offer incentives to buyers because they want to stay in the home-building business," Lind said.
But this is expected to be another tough year for builders.
"Without job growth and business expansion, there will be less demand for new housing. Some potential buyers have taken a wait-and-see attitude while others have lost interest or the ability to purchase a home," said Greg Gross, director of Metrostudy's Central Valley division. "Culprits include the lingering recession, massive job layoffs, strict lending standards and general economic uncertainty."
Gross predicts the San Joaquin Valley's housing market will hit bottom by the fall, then start showing signs of gradual improvement.
"The Central Valley has long been considered the affordable California mar- ket," Gross said. "Recently, the supply of single-family detached homes priced be- low $200,000 has surged, but there are fewer buyers, even for more affordable homes."
That's certainly true in Stanislaus County, where Habitat for Humanity is having trouble attracting families for its new homes, priced at $75,000 to $100,000.
"We're still looking for 25 buyers right now," said Anita Hellam, Habitat's ex- ecutive director. The non- profit organization is among Stanislaus' busiest builders. "We pulled 22 (new home) permits last year. ... And we'll pull 10 more in about six weeks for Hope Village homes."
Habitat for Humanity home buyers must donate time to help build houses and must meet income requirements.
For more information about Habitat for Humanity homes, call 575-4585, ext. 117.
Bee staff writer J.N. Sbranti can be reached at email@example.com or 578-2196.