Modesto Real Estate

Here is an interesting article about the Modesto Real Estate.
From ModBee .com

Good news for buyers: Home prices fall as sales rise in Stanislaus County

By J.N. SBRANTI
jnsbranti@modbee.com

last updated: June 18, 2008 10:27:42 PM

Home prices plunged again in May, but sales of existing homes surged.

Median sales prices fell to $215,000 in Stanislaus County, which was $10,000 lower than in April and 36.6 percent below May 2007, according to DataQuick Information Systems.

But the number of existing homes sold soared by more than 89 percent this May compared with a year ago.

Blame foreclosed houses for both the price drop and the sales spike.

"Banks are competing against banks to get the foreclosure inventory off their books, and that's driving the prices down," said Craig Lewis, president of Prudential California Realty.

Lewis won't call it a fire sale, but he said banks are doing whatever they must to get those vacant houses sold.

"They're bargain-priced, which provides a tremendous opportunity for buyers," said Lewis, recalling how Stanislaus County median prices peaked at $392,000 in 2005. "It's probably the best buying window we've had in the Central Valley in perhaps 30 or 40 years."

First-time buyers are competing with investors to grab those deals.

"If the home is priced in the $100,000s, we're getting an average of 10 offers to buy," said John Melo, chief executive officer of Century 21 M&M and Associates. "First-time buyers are out in force ... and we have a lot of Bay Area investors coming in paying cash for homes."

Investors typically opt for homes priced at $175,000 or less, Melo said, because they can rent them out at a profit even after paying the mortgage, taxes, insurance and maintenance costs.

On Wednesday alone, Melo said, his staff made 27 pending sales. Of them, 21 were bank-owned homes, two were "short sales" -- where the lender must agree to accept less than what is owed on the mortgage -- and four were traditional sales.

While low-priced existing homes are selling well, new houses are hardly selling at all. Only 68 new homes sold during May throughout Stanislaus County, which was a drop of nearly 45 percent compared with 2007.

Melo said his agents handle sales in Atwater's Meadow View subdivision, which hasn't sold a single home in 45 days. It has 17 finished houses sitting empty.

"It's hard for the new home builders to compete with the prices on all those bank-owned houses," Melo said.