FORECLOSURE MARKET IS AT ITS BOTTOM
Posted by cperdew on November 15, 2008
Manteca foreclosures hit bottom?
Builder notes demand puts dent into resale housing supply
Dennis Wyatt
Managing Editor
Manteca Bulletin
The Manteca foreclosure market is at its bottom.
It’s a bold statement for a builder to make but when you’re chief executive officer of a firm such as Florsheim Homes that puts its money where its mouth is, the observation carries a lot of weight.
Florsheim CEO Joe Anfuso drew a lot of flack from other builders back in January when his firm started offering price guarantees to homebuyers at their Valley Park and Valley Blossom neighborhoods southwest of Airport Way and Woodward Avenue.
It was a simple offer. Buy a house from Florsheim anytime in 2008 and if they lowered the base price during that year you’d get a refund on Jan. 1, 2009 for the difference.
It was a risky gambit in the eyes of some other builders who were slashing their prices $5,000 to $10,000 every few months during 2007 to try and compete with the downward spiraling resale market driven by a rising tide of foreclosures. Other builders gritted their teeth at what they thought was another marketing gimmick they may be forced to match especially in light of several builders who had to pacify home buyers who discovered the home they bought just six months previously was selling for as much as $25,000 less when they actually moved into them.
Florsheim Homes has only two of the roughly 30 buyers since the first of the year that they will be sending a refund check to when 2008 ends.
Floresheim – which shifted its product to a price point that targeted entry buyers when they saw the market changed three years ago – won’t debate that its still a rough road for new home builders.
But he sees a lot of good news in the feverish pace of home buying in the resale market.
“It’s good for us (new builders) because the foreclosures have to clean up before our demand picks up,” Anfuso said.
As of last week, there had been 967 previously owned homes that closed escrow so far this year with 750 of those being foreclosures. More telling is the fact there are 393 active resale listings in Manteca – down from a record 670 in September 2007.
Anfuso said from the prices that homes are selling for – the median deal price on 160 foreclosures now in escrow is at $192,193 – represent a price point that has brought enough buyers to put a serious dent into foreclosure inventory.
“It looks like it has pretty well hit bottom in Manteca,” Anfuso said, adding that it isn’t a straight-line bottom with small dips and rises.
He expects the resale market to stabilize in 2009.
Anfuso noted that you wouldn’t “officially” know the bottom has been hit until after several months when various statistics are examined.
“It’s pretty well there, I’d say,” Anfuso said.
Last week, as an example, 30 homes closed in Manteca while 32 new listings were added to the Multiple Listing Service for previously owned homes. Eight months ago, the number of homes going on the market exceeded those being sold each week by 50 percent.
Anfuso said the current economic problems are the outgrowth of loose lending policies.
“We found out that if you offer people free money they’ll take it,” Anfuso said.
Now he said buyers are down to earth and are putting “skin” in the game.
“Buying a home now makes a lot of sense if you’re going to hold on to it, live in it, enjoy it, and raise a family in it,” Anfuso said.
CAROL PERDEW
(209) 239-7979
wwwCentralValleyHomes.com
