Valley home prices stuck in neutral

7th time in 9 months for median $140,000

April 16, 2010 

Real estate prices in Stanislaus County continued to hold steady last month at $140,000 for the median-priced home, industry research firm MDA DataQuick reported Thursday.

It's the seventh time in the past nine months that prices have been stuck at that level. The lack of change may be disheartening to some, but others see it as a welcome sign of stability.

Although there was no change from February to March, the median price last month was up 3.7 percent from the previous year. While not a big jump, it's an improvement over the steady and dramatic declines in home values since the market peaked in late 2005 at $396,000.

Merced County also showed signs of improvement. The median price there was $115,250, up slightly from the previous month and up 9.8 percent from March 2009. San Joaquin County's median home price in March improved by $5,000 from the previous month to $165,000. That's an increase of 7.1 percent from March 2009.

The median home price in California increased 14 percent last month from March 2009, its highest year-over-year increase in more than four years, MDA DataQuick also reported. The median for the state rose to $255,000 from $223,000 in March 2009. Last month's median was up about 2 percent from $249,000 in February.

Lorraine Cardoza, an agent with PMZ Real Estate, said she's glad to see the year-to-year improvement in the median price in Stanislaus County, even if it's less than 4 percent.

"I remember when we had a normal market, whatever that is, and we were happy with a 4 percent annual increase," said Cardoza, who's been with PMZ since 1997. "I think it's a good thing."

She also thinks the March numbers in Stanislaus and other counties suggest the Northern San Joaquin Valley's real estate market will continue to improve as the traditional spring sales season shifts into gear.

The wild card in this, Cardoza said, is bank-owned properties. She said banks aren't releasing as many of those homes for sale as they once were, so there's lots of demand for them when they do come on the market. "That helps to hold up prices," she said.

Sales in Stanislaus were up from 537 in February to 772 in March, but down 17.3 percent from March of 2009. The sales numbers were similar for San Joaquin County. Merced didn't fare as well, with sales declining from February to March and dropping a stunning 46.7 percent from March 2009.

Statewide, DataQuick found, nearly 37,300 homes were sold in March, up almost 33 percent from February, and foreclosures made up nearly 41 percent of all resales last month — their lowest level since November 2009.

Cardoza said many agents just don't know how many homes the banks are still holding onto. When one of them sells, it often sets the price in that neighborhood. She said that can be tough on people with homes to sell who don't want to lower their prices to match bank-owned properties.

Even if a seller holds out for a higher price and gets it, Cardoza said, appraisals — which take into account what's sold in a neighborhood — often come in lower than expected. "We've all seen deals go sideways, every which way, because of it," she said.

DataQuick President John Walsh also had a cautious note:

"A variety of data indicate prices in many communities have more or less flattened out or risen modestly, while they remain soft in others."

Walsh said the future stability of the state's housing market would depend heavily on the strengthening of the broader economy, which faces several risks.

"Government housing stimulus is fading, and there are threats from higher mortgage rates, more distressed properties hitting the market and continued job losses," he said.

Bee City Editor David W. Hill can be reached at dhill@modbee.com or 578-2336.

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