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October 28, 2007

3 price cuts, but no buyers after one year

Dan Saldivar has been trying to sell his Modesto town house for more than a year.

"I've dropped the price three times already," said Saldivar, 56, who reduced it to $245,000 last week. "I'm borderline about whether I want to just pull the sign out of my yard and stop trying to sell."

He bought the 1,250-square-foot, three-bedroom home for $164,000 in 2003. It greatly appreciated in value the first two years, and Saldivar tapped some of his increased equity by taking out a second mortgage. Now he owes more than $190,000 for the home.

Although he has enjoyed the town house, Saldivar is ready to move into something bigger. He wants to buy an empty lot and build a house. For many years he has been in the painting industry, and he said he's in the process of getting a general contractor's license.

Saldivar wants to oversee construction of his own custom home. To make that happen, however, he's counting on selling his town house for a profit.

"I wanted to walk away with $40,000 to $50,000 in equity, which would give me enough to get a construction loan," said Saldivar, who also has a real estate license and works for Weeks Real Estate.

Selling town houses in Modesto has become difficult, however, because seven former apartment complexes recently converted to owner-occupied units. Those former rentals now compete for buyers with the city's previously built condos and town houses.

One of those conversion projects, The Villas at Creekside, has had such a tough time selling that it will auction off its last 29 town houses Nov. 18, with minimum bids starting at $100,000 to $130,000.

Saldivar's town house is less than a half-mile away, but he is confident that auction won't affect the value of his property. He said his town house is worth more because it faces Creekside Golf Course, has its own garage, is only one story and has relatively low homeowner association dues.

But if he doesn't attract a buyer this winter, Saldivar said, he'll likely reduce his price again in the spring.

-- J.N. Sbranti

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