Patterson shines in Stanislaus home price recovery

jnsbranti@modbee.comMay 22, 2013 

BR Patterson Growth 02

Although housing construction has slowed, development continues in Patterson, Calif., seen from the west looking east. March 9, 2009. (Brian Ramsay/The Modesto Bee)

BRIAN RAMSAY — Modesto Bee

— If it happened in any other place or time, home prices soaring by 62 percent in one year would be astounding. But in Patterson, such a price increase is merely a step in the right direction.

During the past decade, Patterson home prices skyrocketed higher and plunged further than about any other place on Earth. Now, prices are headed back up.

In April, Patterson homes sold for a median price of $228,000, which was about 62 percent more than a year ago.

Stanislaus County's median home price, by comparison, was $162,000 — a 20 percent increase over April 2012, according to DataQuick statistics.

Despite Patterson's big increase, homes there still are selling for 57 percent less than what they were fetching seven years ago.

When the housing market peaked during spring 2006, median-priced Patterson homes were going for $531,000. Prices fell fast and hard after that, bottoming out at about $140,500 last year. That was about a 74 percent decline.

The real estate crash caused many of Patterson's underwater homeowners to walk away from their mortgages, and numerous new home developments there went belly up.

Kiper Homes bought up 46 lots in one failed subdivision, and last June it opened Mahogany at Patterson Gardens.

"The homes initially were priced in the high $100,000s, and they could not give them away," said Sonja Jarvis, Kiper's saleswoman in Patterson.

What a difference one year makes.

Kiper is down to its last five homes now, and its recent sales all have been for more than $300,000 each.

"Our prices have gone up $85,000 since November," Jarvis said. "They've increased with the market."

Used home prices also are way up in Patterson, but it's tough to find one for sale.

"We've seen homes get 39 offers to buy," said Mary Ann Arendsee, a broker with Patterson's Realty World Scheuber & Arendsee Properties.

The number of homes for sale countywide has been shrinking. Last month, only 555 Stanislaus houses sold, which was 16.5 percent fewer than in April 2012. Back in 2005, by contrast, it was common for more than 1,000 Stanislaus homes to sell each month.

Because fewer homes are on the market these days, "it's really hard for buyers to get a home unless they have a cash offer," Arendsee said.

All-cash offers from investors have become prevalent in Patterson.

"About 50 percent of our sales were to cash buyers, until we hit the $300,000 (price point)," Jarvis said about Mahogany homes.

Arendsee said that the same thing has happened in the resale market.

Arendsee noted the trend's prevalence. "A lot of neighborhoods now have more investor properties than owner-occupied homes," she said. "Having prices go up is positive, but I'd like to see more homes selling to the families who will live in them."

As they did a decade ago, Bay Area families seeking homeownership are traveling to the Northern San Joaquin Valley — especially to communities near the valley's western edge, according to Angelica Lopez, a PMZ Real Estate agent.

"The buyers I'm working with now are from San Jose," Lopez said. "They really want to buy their first home, and they fear this is their last chance (to get an affordable price)."

Lopez said her commuter clients initially wanted to buy in Tracy or Manteca, but prices in those communities are too high for them, so they're looking in Patterson.

Depending on the ZIP code, Manteca's median home sales prices last month were $235,000 to $252,500. Tracy's prices ranged from $250,000 to $440,000.

Prices are much lower in Modesto — where April's median sales price ranged from $90,000 in west Modesto to $181,000 in the northwest part of town.

Home prices statewide have been climbing steadily for 14 months, according to DataQuick.

The median price paid for a California home last month was $324,000. That was the highest median since June 2008, and it was a 22.7 percent increase from April 2012.

California home prices peaked in spring 2007 at $484,000, and they hit bottom at $221,000 in April 2009.

During the depths of the recession, most homes sold in the state were foreclosed properties being unloaded by banks. But only 13.5 percent of the houses sold last month were former foreclosures, DataQuick research shows.

The typical mortgage payment California home buyers committed themselves to paying last month was $1,157 — that's less than half of what new mortgages were requiring during the market's peak.

Bee staff writer J.N. Sbranti can be reached at jnsbranti@modbee.com or (209) 578-2196.

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