Northern San Joaquin Valley home sale prices plunged again in February, dropping to levels not seen since early 2004.
But for the first time in many months, Modesto real estate brokers are practically giddy with enthusiasm over jumps in pending sales and prospective buyers.
First the bad news: Median home sale prices fell to $250,250 last month in Stanislaus County. That was $104,750 below February 2007 and $10,000 less than what homes sold for January.
San Joaquin County saw an even bigger price drop. The median-priced home there went for $275,000 in February, which was $130,750 less than the year before and $20,000 less than in January.
Merced County wasn't much better. Homes there sold for a median $225,000 in February, which was $95,000 below the year before and $9,750 lower than in January.
The sales statistics, from DataQuick Information Systems, show some communities have been hit harder than others.
Home prices dropped most in south and west Modesto (down 54.7 percent in one year), Patterson (down 37.3 percent), Turlock (down more than 38 percent), Waterford (down 40.9 percent), Denair (down 47 percent), Atwater (down 35.1 percent) and Los Banos (down 35.6 percent).
Now the good news:
"The number of homes being sold is increasing substantially," said Mike Zagaris, president of PMZ Real Estate. "The value of homes that have closed in March compared to February is up 31 percent for us."
Other real estate companies agree business is booming.
"Being in the foreclosure capital of the world is actually starting to be to our benefit because it's made it affordable to buy a home again," said Craig Lewis, president of Prudential California Realty. "Prices have been driven down so much that local residents can afford them."
It's now possible to buy "a 1,000-square-foot home in OK condition for $100,000 to $125,000 in Modesto," said John Melo, chief executive officer of Century 21 M & M and Associates.
"We're selling homes priced below $200,000 on a daily basis now," Melo said. "First-time buyers and investors are entering the market, and they're getting steal-of-a-deals."
Melo said 70 percent of pending sales are for bank-owned houses that had been foreclosed on. He said banks are willing to slash prices dramatically just to get those houses off their books.
"Inventory is just starting to shrink," Lewis said. Based on deals in the works, he predicted a surge of sales will close escrow during the next 60 days.
After two years of falling home prices, Zagaris said the increase in sales volume signals that price stabilization is near.
"I believe we've reached the bottom of the market," said Zagaris, who thinks prices will "bounce along the bottom" for a while as the excess inventory of homes for sale clears out.
Melo said that even though additional foreclosed houses are coming on the market every day, banks are pricing them low to sell them quickly. He said such deals are so good that those houses often get multiple people competing to buy.
Attracting buyers to some neighborhoods, however, has forced sellers to drastically cut prices.
Last month in the 95351 ZIP code, which covers west and south Modesto, the median home price was $145,000. That was less than half what homes sold for there a year ago. About 40 homes in that ZIP code are listed for sale with prices at or below $100,000.
Melo warned that some of those very low-priced foreclosure houses are in rough shape, with no appliances, trashed cabinets, holes in walls and other damage.
Potential buyers shopping for homes should get inspections and warranties before buying, Melo suggested.
To get the best deals, Melo said, buyers need to be approved for loans before they make offers to buy. He said banks selling foreclosed properties are most likely to accept offers from those able to close escrow within 30 days.
Bee staff writer J.N. Sbranti can be reached at email@example.com or 578-2196.