MODESTO — After months of stagnation or minimal increases, prices in the Northern San Joaquin Valley housing market finally have made a significant move up the charts.
The median price for homes sold in Stanislaus County in September was $145,000, according to DataQuick. That's up from $140,250 in August, and a 12.5 percent increase from the median sales price of $129,000 a year ago.
"I think it's a sign that things are changing," said Patrick Wallace, president-elect of the Central Valley Association of Realtors and a broker with Re/Max Executive.
It is not, however, a sure sign that the typical house is worth 12.5 percent more than it was a year ago or that the area is anywhere near returning to the pre-bubble-bursting days of December 2005, when the county's median home price hit $396,000.
"The median home price is a little deceptive these days," said Jeffrey Michael, director of the Business Forecasting Center at the University of the Pacific in Stockton. "The real appreciation rate is more along the lines of 5 percent or so. Nevertheless, it's part of clear evidence that we seem to have reached the bottom."
At the same time, DataQuick said foreclosure activity in California fell to a five-year low in the third quarter.
DataQuick said Wednesday that there were slightly more than 49,000 default notices filed from July through September, down 31 percent from the same period last year and down 64 percent from the first quarter of 2009. It is California's lowest level since the first quarter of 2007.
Default notices are the first step in the foreclosure process and a leading indicator.
The big question mark remains with the "shadow inventory" held by banks, homes that have been repossessed. Many believe there could be a glut of these released for sale, dropping prices by overwhelming the market with available supply.
"There's so much conflicting information about where inventory is and when it will be available," Wallace said. "What we don't know is how (the banks) are going to dole them out."
Right now, though, demand dwarfs supply.
"We have buyers," Wallace said, describing his customers as a mix of first-time homeowners, investors and "we're even starting to see some move-up buyers."
What's missing, Wallace said, is sellers.
"If you get a listing, it's almost guaranteed it's going to sell," he said.
Michael said short sales and foreclosures can impact the median home prices even as values continue to steadily rise.
"I wouldn't be surprised to see median prices stagnate even though the market itself continues to heal," he said. "It's just the nature of the market today."
Still, he said, seeing the number go up rather than stay the same or even drop is a positive sign.
"It's an expected step and a necessary step of this healing market."
Bee Breaking News Editor Patty Guerra can be reached at email@example.com or (209) 578-2343.