Where is the bottom?

Here is an interesting article from the Modesto Bee.

Stanislaus County housing prices stabilized a bit last month, slowing the brutal price plunge that began three years ago.

Median-priced homes sold for $160,000 during November, which was $1,500 less than October. That decline was far less than previous price drops. Between September and October, for instance, home prices fell $17,500.

Stanislaus home values have fallen nearly 60 percent since peaking three years ago, according to housing statistics provided by MDA DataQuick.

First-time home buyers and investors are taking advantage of the now-affordable pricing. Sales volume was strong during November, as more than twice as many homes sold compared with the same month last year.

The sales statistics aren't nearly as comforting for Merced and San Joaquin counties.

Merced prices continued plummeting in November, falling to a median of $124,500. That was $12,250 less than October, and nearly 66 percent below what houses were selling for three years ago.

San Joaquin prices dropped to $172,000 last month, a staggering $28,000 fall from October. Its home values have declined nearly 62 percent in three years.

The Northern San Joaquin Valley has been rocked by the foreclosure crisis, which experts agree is pushing down home prices. Those experts disagree, however, on whether the region is through the worst of the housing mess.

"It comes down to just the sheer volume of problem loans in your area," said Rick Sharga, senior vice president of RealtyTrac, which monitors foreclosures nationwide. Sharga predicted the region will continue to lead the country in foreclosures through 2009.

But since this region was first to enter the foreclosure mess, some think it may be among the first to rally.

"It is already recovering," said Sean O'Toole, founder of ForeclosureRadar, which tracks California real estate. He said it's a good sign that the valley's sales are up and prices are affordable. "Whereas the so-called strong areas in California, like San Mateo or San Francisco, are now only beginning to correct (by lowering prices). At current prices, I'd much rather own property in Modesto than Palo Alto at the moment."

Bargains to be had

Local realty firms also are seeing some positive signs.

"There's a tremendous amount of demand for housing at these prices, and there are good interest rates right now," said Mike Zagaris, president of Modesto-based PMZ Real Estate.

Whether home buyers will continue to be able to take advantage of low-cost housing opportunities depends on the economy, Zagaris said, "because we have a growing recession that's putting people out of work."

Zagaris also is concerned that many current owners are giving up their homes because they've lost so much equity.

"I'm being told by my people in the trenches that the vast majority of those facing foreclosures now have no interest in redoing their loans. They just want out," Zagaris said. "If that's true, there's no stopping these foreclosures."

Demand catching up

What has stopped is most new home construction.

That's good, according to Sharga, because the region needs to reduce its overall inventory of homes so demand can catch up with supply.

Most of the valley's new home builders have sold all their finished houses and they're only building new ones after they sign sales contracts, according to Kent Steinwert, chief executive officer for Farmers & Merchants Bank of Central California. He thinks that will stabilize new home prices.

Steinwert is bullish on the valley's housing future: "The fundamentals are there. We're growing in population ... and we can't build enough homes long term to meet demand."

Population estimates released this week show there's been a shift in who is living in the Northern San Joaquin Valley.

More people are moving out of the region than are moving in. New population estimates from California's Department of Finance determined that about 6,824 more people moved to other parts of the United States from Stanislaus, San Joaquin and Merced counties this year than moved to the region.

But new immigrants from foreign countries and high birth rates among current residents more than made up for that loss, the figures showed, so the three counties still gained in population.