First-Time Buyers Grab Homes on Lists of Bank Foreclosures
A total of 1,765 existing houses and properties on lists of bank foreclosures were sold in the span of a year and a half in California. The total number of properties sold represented an overall investment of $369 million.
The first half of this year saw 600 homes escrowed. If the market continues its current buying pace, the year will end with 1,202 properties on lists of bank foreclosures sold in the city of Manteca alone.
In 2008, 1,165 homes were sold, a remarkable improvement from 402 the previous year and 2006’s 627. Currently, there are 221 properties with pending sales deals in Manteca. Real estate experts identified first-time buyers as the dominant market players in Manteca and Northern San Joaquin Valley. The group is followed by investors and some Bay Area homebuyers.
The median price for a typical property on lists of bank foreclosures is $178,000. Three years ago, many homebuyers avoid the Manteca area because of the high prices of properties, with the median price reaching $413,000.
Meanwhile, new home sales were dominated by Bay Area buyers. Buyers’ interest is attributed to the age-restricted community of Del Webb in Woodbridge and the Summit Collection located in Union Ranch.
Five years ago, new home construction in Manteca measured 3,000-square-foot. The 10 permits issued in February last year required new home construction to measure only 1,577-square-foot.
In May 2008, the average size of new housing starts increased slightly to 1,760-square-foot. And a year after, the typical home start averages 2,768-square-foot.
On the other hand, building costs remained high in the area. Last May, the cost of building a 1,000-square-foot structure was pegged at $25,000 while a home measuring 2,768 square feet will cost $39,000 to build.
Year-to-year comparison showed that building a home in 2009 can cost $161,921 per unit compared with $136,616 in 2008. These figures do not reflect growth fees, connection charges, developer cost and land costs which may reach $65,000 per property.
For the meantime, sales of existing homes and properties on lists of bank foreclosures are holding steady due to federal tax credits, low home prices and interest rates. And builders are hopeful that the growing number of qualified buyers could help boost home sales in the area.
