Houses are selling?

This is from the Newspaper in Manteca,Ca.
Home sales pace hits one every 6.2 hours

Dennis Wyatt
Managing Editor

Homes are now selling every 6.2 hours in Manteca.

It is a torrid pace even surpassing the go-go days of the housing bubble that is fueled by one thing and one thing only - housing prices too tempting to resist.

There were 635 closed deals as of Aug. 22 within the City of Manteca. But that is only a part of the story. The sales pace virtually doubled overnight in mid-July when banks started aggressively pricing foreclosed homes to the point where it makes sense for investors to buy as well as first-time homebuyers. It marked the first time any real estate expert can recall when it cost less for a renter to own as well as for investors to buy homes and immediately rent them - even after spending money to fix them up - and get a positive cash flow.

Another sign of the major upswing in home buying activity are the pending sales. There is a record 301 pending sales of existing homes in Manteca. To put that in perspective, the number of homes that have gone pending with offers in the past 30 days is just 101 homes less than were sold all of last year in Manteca through the Multiple Listing Service.

Another positive is the inventory of available homes. It has been dropping steadily since it reached a record 627 homes a year ago in September 2007 despite the fact the number of foreclosed homes has accelerated in the last two months.

In a normal market, the housing supply - how many months it would take for existing inventory to get absorbed if no more homes were added to the inventory and the sales pace continued - six months is considered equilibrium and anything shorter than that is considered a sellers market.

But since foreclosures are driving 80 percent of the sales, the fact there is essentially a 4.8-month supply isn't working to the advantage of sellers. Instead, the fire sale pricing continues at a level that apparently is working as banks are unloading foreclosed homes ahead of an increasing wave to keep a floor under the potential for even deeper losses on loans.

The fact the median selling price so far on all homes that have sold this year in Manteca has now slipped to $253,000 would at first glance look like the market is in the 2002-03 price range where median house prices were between $237,892 and $267,030 on previously owned properties.

But that is only part of the story.

The bottom of the market is reflecting pricing of the late-1990s.

A few examples:

• A 1,094-square-foot home at 324 S. Powers Ave. closed escrow this month for $100,000. A similar property sold in the same neighborhood for $92,000 in 1997.

• A 1,010-square-foot home at 314 Dan St. closed escrow this month for $109,900. A similar sized home in the same neighborhood fetched $115,000 in 1998.