Home Affordability builds

Home affordability has hit another all-time high in Stanislaus County, putting homeownership in reach for more first-time buyers.

Sales prices, meanwhile, held steady in October, with the county's median-priced home selling for $140,000.

But foreclosures continue creeping up as 569 more Stanislaus homeowners defaulted on their mortgages last month.

Modesto kindergarten teacher Andrew Sirogiannis carefully tracks all those housing statistics as he hunts for his first home.

"I've been waiting for what I think is the bottom of the market before I buy," said Sirogiannis, 31. "I'm looking for a good, safe neighborhood and a good price (under $300,000). If I buy something, it probably will be between Thanksgiving and New Year's when the market slows down and not so many people are bidding for houses."

He's a patient man.

Sirogiannis has been financially ready to buy a home for about five years, but he thought purchasing would be foolish "during the real estate boom because houses were overpriced."

Since 2006, he has watched home prices plummet, affordability climb and government incentives sweeten the deal for buyers. Although he would qualify for the recently extended $8,000 federal tax credit for first-time buyers, Sirogiannis said he fears the housing market will crash once that temporary stimulus ends.

He is not the only one wary about the housing market. Some suspect that a massive "shadow inventory" of foreclosed homes soon will go on sale in the Northern San Joaquin Valley.

Fearing a 'flood'

"When those foreclosures flood the market, home prices will go down again," predicted Jordan DeBoer, an agent with Integrity Real Estate Services in Modesto. "But if you've got the money and you're planning to live in a house for at least three to five years, then it's still a pretty good time to buy."

Twenty-year-old Diana Ag-uilar did just that.

Using her good credit rating and her income from managing a Ceres insurance office, Aguilar purchased a $115,000 house in Livingston.

"It was super simple. I was actually amazed," Aguilar said. The foreclosed four- bedroom house previously had sold for more than twice what she paid, so she is confident she got a good deal.

Aguilar's home payment now is less than $900 a month, compared with the $800 monthly rent she had been paying. She got a Federal Housing Administration-backed mortgage that only required a few thousand dollars for a down payment. She also qualified for the $8,000 federal tax credit.

Although finding the right house can be difficult, Aguilar offered this advice to other first-time buyers: "Don't give up. Just keep looking. You can do it. Everybody can these days."

New affordability statistics support her opinion.

The National Association of Home Builders/Wells Fargo Housing Opportunity Index released Thursday calculated that median-income families in Stanislaus could afford 84.5 percent of the homes sold in the county this July, August and September.

Compare that with 2005 when the typical Stanislaus family could afford only 3 percent of the homes sold because the median sales price was $396,000.

Since then, more than 17,000 Stanislaus homes have been foreclosed on by lenders and that number continues to grow, according to ForeclosureRadar statistics.

"There was a significant month-over-month increase in activity at the courthouse steps in October, with both the number of properties going back to the bank, and the number purchased by third parties increasing," said Sean O'Toole, who heads ForeclosureRadar. "Despite the increase, we still saw the number of foreclosures scheduled ... rise, as more and more homeowners find themselves in foreclosure limbo."

Summer stabilization

When homeowners walk away from their mortgages or are forced out by lenders, their empty houses wind up in the resale market. The mass of foreclosures that began in 2006 has caused a steady collapse of home prices. But the market seemed to stabilize this summer, and home prices have been fairly flat the past five months.

But bargain home prices have caused a buying frenzy as investors and first-time buyers compete to purchase foreclosed properties.

"My phone rings off the hook," said John Hertle, owner of Exit Realty in Modesto. Hertle said sales are so brisk that his office needs to expand its staff of agents.

Mortgages are not hard to find, but Hertle said that to qualify "you need to have your credit and finances in order." That means buyers need verifiable income and credit scores of at least 680, and they can't have a lot of credit card debt or large car loans.

For those who meet that criteria, housing has become surprisingly affordable.

"If you're making $25,000 to $30,000 a year, you can buy a house," Hertle said. "You may not like the location it's in, but first-time buyers have to start somewhere."

Those searching for homes in decent shape and desirable locations should expect to compete with other buyers, said Rebecca Montgomery, an agent with PMZ Real Estate.

"Anything priced under $200,000 in good condition is getting multiple bids," said Montgomery, who advises her clients to offer at least 5 percent to 10 percent more than the asking price. "Some houses get as many as 41 offers."