A house with three bedrooms and two bathrooms in 1,467 square feet at 1194 Pestana Avenue directly across from Diamond Oaks Park in East Manteca closed escrow last month for $101,000.

The median resale price of a home today in Manteca is $176,250.

The last time the median was that low was in 1999.
Even so, a large chunk of the Manteca the market is acting like it is 1991.

A spot check of closed escrows shows some startling “dips” in terms of what some three bedroom and two bathroom homes are selling for versus the rest of the market. And – surprisingly – it has nothing to do with location.

One of the homes at 310 Charles Avenue in Central Manteca near Doctors Hospital consisting of 1,504 square feet closed escrow for $135,000 on Aug. 4. That is just $900 under what the median price was in 1991 when that style of production home that started rolling out in the 1970s was still popular although most had expanded by 1991 to 1,800 square feet. Just a block away a two bedroom one bathroom custom home built in 1953 sold for $125,000 that year.

A home with six more square feet than the Charles Avenue home that is located at 1490 Junewood Court in North Manteca sold for $169,000 on Aug. 14. Floor plan wise, the biggest difference was the secondary bathroom wasn’t a half bath as it is on Charles Avenue.

If that wasn’t enough to confuse you, consider the 1,467 square foot home at 1194 Pestana Avenue directly across from Diamond Oaks Park that closed escrow on July 31. It was built in the early 1990s when the base model of the same square footage sold for $119,000. The selling price this time around was $101,000.

What gives? Why is the market – which is definitely bottom line driven in most cases – have so many wild variables in what properties finally sell for when escrow closes?

In a world where things like a swimming pool or even a remodeled kitchen adds nothing to value, it’s the basic things that hammer prices assuming everything is in OK shape. If there are two full bathrooms as opposed to two with one being just a toilet and sink you immediately get a lot of interest. If the home is two bedrooms and one bathroom, the problem is the three bedroom and two bathroom homes are so aggressively priced now that even people who don’t need more the two bedrooms and one bathroom are going after the three bedroom and two bathrooms. Before, higher prices prompted them to focus on securing just what they needed not what they wanted.

If someone has ripped out the air conditioning and heating system, the home can’t go FHA unless the bank or whoever got; left holding the bag puts in new units in place.

It explains why many newer homes those are structurally sound and in good locations are fetching as much as $40,000 less than their counterparts in older parts of town.

The reason is simple. Few – if any – commercial lenders will also finance the purchase of such a house. That leaves it to buyers who end up spending $10,000 to $15,000 and then turn around and try to flip the house for what it is worth in today’s market. For less than two weeks work doing things such as painting, replacing cabinets, minor cosmetic repairs, and putting in place a heating and cooling system it isn’t unusual these days for such investors to walk away with $15,000 in a month or so after buying the home. And then, more often than not, the homes are flipped to buyers with either an FHA loan or have a conventional loan.

Depending upon who you talk to, there is a theory that the backlog of foreclosures – and there are a number still in Manteca – that are taking forever to reach the market either has to do with the banks being overwhelmed or a desire not to collapse prices any further by just flooding the market with resale homes.

The crowd was a mix of investors, realtors and couples hoping to score a nice price on a home for themselves.

All had their eyes fixed on 208 San Joaquin County houses up for auction with beginning bids starting as low as $1,000.

“It’s a chance to get into the market,” said Angela Alvarez of Stockton. “There’s one I like. I’ll see how the bidding goes.”

Bidding was fast and furious, with homes that once sold at inflated prices during the region’s housing boom but fell into foreclosure during past year’s subprime lending meltdown.

On Sunday, a four-bedroom Organic Way home in Tracy that once sold for $640,000 went up at a starting bid of $99,000. Auctioneer Jeff Frieden blazed through bids in $10,000 increments, and in a few seconds, the high bid stood at $250,000. “Do I hear $260,000? Come on folks, I assure you, you’re not overpaying,” he said. His reassurance satisfied one bidder who won the opportunity to buy the home for $260,000.

Winning bidders at the auction were required to pay a 5 percent fee to the host Real Estate Disposition Corporation. A spokeswoman said the company was hosting six different auctions in California on Sunday, the biggest day in the company’s history and its fourth tour in Stockton this year.

A winning bid doesn’t guarantee a sale, however.

Investor Albert Saballa, 63, has been to three of the four REDC auctions in Stockton this year. The first two auction he bid on and won the chance to buy the same Stockton house.

“I won the bid at $130,000 the first time, but couldn’t get it financed,” Saballa said. “The second time, I won at $115,000 and had a cash offer. The bank rejected my offer.”

Javid Iqbal of Stockton hopes his negotiations with bank representatives will go more smoothly. With $75,000, he was the winning bidder of a south Stockton home previously priced at $300,000.

“I’m happy to win,” Iqbal said before he met with bank representatives and lenders. “It’s an average house, but a good price.”

Realtor Mark Stebbins said auctions such as Sundays can be risky for buyers. Many people place bids on the homes seeing only a photo, and he reminds that the bank can reject offers.

“The key for people is to be persistent and patient,” Stebbins said. “Do your research. There are a lot of good deals out there.”

Stebbins advice might be fitting for Alvarez. She said the bidding on the home she hoped to win soared out of her price range.

“I wasn’t going higher than $150,000 and it sold at over $200,000,” she said leaving the auditorium. “The bids get high real fast.”

5 Things to Keep in Mind

Getting the right mortgage is much More than just getting a loan, because it has an impact on wealth building, retirement and other strategies in personal finance.  Here are five critical things prospective home buyers need to know about getting a mortgage.

1.Make a down payment -  More favorable loan terms are available to consumers who can put at leas 5% down.

2. Be smart when shopping for interest rates -  A higher interest rate may not include fees, and a lower rate may include fees that elevate the actual financing cost.

3. Consider paying more for your house -  Instead of negotiating a reduction in the sale price, ask the seller to pay for the costs to “buy down” the interest rate on the loan.  This can substantially reduce the monthly payment, saving cash flow in the short run and increasing your principal balance over the long haul.

4. Improve debt-to-income ratio – The higher your total outstanding debt compared to your total income, the less likely you are to be approved for a loan.  For the best loan terms, work to keep your debt low.

5. Improve credit scores – Check your credit report and get errors corrected a, get rid of liens, and resolve any late payment issues for a quick and positive impact on your credit score. 

Jose A. Nuno and his wife, Gabriela, are first-time home buyers who spent six months working the busy market for a foreclosure house to fit their budget.

They didn’t buy a foreclosure, though.

They ended up buying a new house.

After several months of searching, the Nunos actually had their $250,000 bid accepted in the highly competitive foreclosure marketplace on only their second purchase attempt – generally considered to be a success story.

They also expected to spend as much as $20,000 for repairs and necessary purchases out of pocket, because their bank wasn’t willing to fund those costs.

Just in case, they took a look at some new homes, not expecting to find anything that would change their minds.

“That’s when I started realizing there was not much of a (cost) difference between new and (a foreclosure),” Jose said.

They backed out of the foreclosure purchase and bought a new 3-bedroom, 2.5-bath two-story house in a Manteca subdivision of Florsheim Homes, a Stockton builder that decided early in the housing downturn to downsize its models and prices and market affordable homes for working-class families.

Models start at about $250,000, and the Nunos bought their 1,500-square-foot Florsheim house for $285,000. The monthly payments are higher than those for the foreclosure would have been, but not by much, Jose said, and the couple wouldn’t have to struggle to come up with thousands of dollars to make the foreclosure house livable.

Although foreclosures are touted “as the best price in town – pennies on the dollar – some are gross,” he said, “and you’re going to be in an environment where you have to put a lot of money into it, from new carpeting to painting and appliances.”

Joe Anfuso, president and chief executive officer of Stockton-based Florsheim Homes, called the current home-construction market “certainly difficult.”

The numbers show it.

According to the Construction Industry Research Board, which tracks the building sector in California, there were 535 building permits issued for single-family homes in San Joaquin County during the first seven months of this year. That compares with 3,906 permits issued in the same period of 2005, the final year of the previous building boom.

Anfuso said builders have dealt with the slower market by cutting their organizations by about two-thirds from three years ago and by cutting costs as much as possible.

“It’s a difficult market to maneuver in,” he said. “It’s all about cash management and not profitability.”

Still, the low monthly permit numbers have been slowly climbing from 75 issued in April to 96 last month.

Anfuso said Florsheim has sold houses in the past two months to perhaps four or five buyers who decided to buy new after finding the foreclosure market more difficult than they expected or discovering that the homes were “more challenging” than they expected.

“The competition (for foreclosures) is fierce,” he said. “You have people who have bid five, 10, 15 times and are getting beat out. They start asking, ‘Is it really worth it?’ Our agents are fielding a lot of questions from people who are looking at that market and don’t like that process.”

Greg Paquin, president of the Gregory Group, a real-estate information and consulting service in Folsom, said builders can be competitively priced against foreclosures, but most people don’t seem to realize that yet. That’s especially true in the Central Valley, where foreclosures take up 85 percent of the market, he said.

Los Angeles-based KB Home also is reporting lookers and buyers who are checking out new homes because they were dissatisfied with the foreclosure market.

“There’s no question about it that there is a good portion of our customers who were looking at foreclosure possibilities,” said Marc Burnstein, vice president of sales and marketing for KB Northern California. “We’re seeing that every week.”

Besides facing the prospects of taking over a foreclosure that may have been trashed by the previous owner, many prospective foreclosure buyers are nervous and concerned that the repossessing banks don’t have to disclose faults and defects in the property, he said.

The company has introduced home models as small as 1,300 and 1,400 square feet, with price tags starting at about $222,000 in, say, KB Home’s Riverbend development in Stockton.

Burnstein said home shoppers are admittedly extremely price conscious these days, but the company does a lot of research to determine where to aim for buyers in a residential marketplace dominated by foreclosures.

“We are very competitive on the price side,” he said. “We’ve gone to smaller plans at a tremendous value relative to a foreclosure with no warranty and perhaps huge fix-up costs.”

Picking up new business from the foreclosure market is a glimmer of good news in a time when there hasn’t been much of that for builders.

The West Nile Virus poses a serious health issue.So says Larry Lenschmidt of the Manteca Garden Club.

By MARTIN CRUTSINGER, AP Economics Writer

The sharp decline pushed the 30-year rate below 6 percent for the first time since late May and marked the lowest level for this rate since they averaged 5.88 percent the week of April 17.

By Dennis Wyatt, Manteca Bulletin

When experts try to do a post-mortem on the torturous housing collapse caused by liar loans and super unconventional lending practices that triggered massive amounts of foreclosures, last month in all likelihood will be when the bottom was hit for the lower end of the market.

And if you don’t think higher interest rates aren’t in the works, then you are a lot more confident that most about this country’s ability to control the rate of inflation and get its trade deficit off of a $2 billion daily bleed.