MODESTO -- Stanislaus County's home prices edged up again in October for the fourth consecutive month, but the flip side of that good news is that houses are becoming less affordable.
The median sales price for Stanislaus homes hit $145,000 last month, which was $1,000 more than September, according to DataQuick statistics. That's nearly a 12 percent price increase in one year.
After more than five years of falling or virtually flat home prices, this is a pleasant change for some.
But while the market turnaround may please current homeowners, those trying to buy a home are finding them less affordable.
The Housing Opportunity Index has declined about 3 percentage points in Stanislaus County this year. The new numbers released Thursday show that 89.3 percent of the homes sold in the county this July, August and September were affordable for the region's middle-income families.
Affordability peaked the first three months of this year, when 92.5 percent of homes were within the grasp of middle-income buyers.
That index, developed by the National Association of Home Builders and Wells Fargo Bank, documents just how out-of-whack Stanislaus' housing market had gotten back during the building boom.
At the worst point in 2005, only 3 percent of the homes being sold were affordable to middle-income families. Stanislaus' median-priced homes were selling for $396,000 back then.
So by comparison, affordability remains strong in Stanislaus and well above the national average of 74.1 percent.
Housing stock depleted
While home sales prices are near what they were a decade ago, actually finding a home to buy now is a challenge.
The for-sale housing inventory is extremely low in Stanislaus, said John Brasil, a Modesto real estate agent for Century 21 M&M and Associates.
"I have eight buyers actively looking to purchase homes, but whenever any of them puts in a purchase offer, they end up competing with like, 12 other people," Brasil said.
He said bidding wars often erupt, with sales prices increasingly ending up above appraised values.
"That's why prices are edging up in Modesto," Brasil said. "There's so much pent-up demand out there."
The same is true elsewhere in the county.
"Every house that hits the market in Turlock is pretty much sold within a week or two," said Clarence Oliveira, another Century 21 agent.
Oliveira said "there aren't many bank-foreclosed homes on the market now," so the few remaining sellers can push for more money than before.
Potential buyers diverse
He said there's still a broad mix of buyers.
"We're still seeing a lot of investors who are buying homes, fixing them and flipping them (to other buyers)," Oliveira said.
Also in the market to buy now are former homeowners who had lost their homes during the early days of the foreclosure crisis. Brasil said that after three years as renters, some of those folks have repaired their credit enough to qualify for a new mortgage.
First-time buyers, too, are shopping for homes.
Even at the current prices, Brasil said those who are renting often can buy a house for roughly the same cost per month.
For example, Brasil said someone paying $1,150 per month in rent can buy a $173,000 home for the same cost with a Federal Housing Administration loan.
Bee staff writer J.N. Sbranti can be reached at firstname.lastname@example.org or (209) 578-2196.