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Ryan and Breanna Anderson and their two daughters, Gabby, 2, left, McKenna, 3, right, and son, Ethan, 7 months, stand in front of their recently purchased Lodi home. After being out-bid on six different homes, the Andersons finally had an offer accepted and closed escrow in January. (Dan Evans/News-Sentinel)
Bidding wars break out in Lodi: Is real estate finally stabilizing?
When Ryan and Breanna Anderson decided they wanted to purchase a home in Lodi for their young family, they knew they would have to act quickly to take advantage of plummeting prices.
And though prices for homes in the area are down, so is inventory. And interest rates are near historic lows.
That’s making it tougher to snap up bargain homes — and has led some to say Lodi’s real estate market may be stabilizing.
“We’d been saving up and (knew) that there was a brief window that homes would be affordable,” said Ryan Anderson, who is a youth pastor and teacher. “This was a rare opportunity for us to jump in.”
Indeed, average prices on homes in Lodi have fallen 30 percent from last year, according to MetroList Services, a database for real estate professionals. A home in February 2008 that might have been priced for $288,269 went for about $197,296 in February of this year.
Couple those low prices with interest rates hovering around 4.6 percent, and you’ve got buyers on the hunt.
“Interest rates are the lowest they’ve been since 1971,” said Ryan Sherman, president of the Lodi Association of Realtors.
But people like the Andersons aren’t the only ones searching for their piece of the American Dream. Sherman estimates that only about 50 percent of those in the market are first-time home buyers. The other half is comprised of investors who will either fix houses up and resell them or rent them out.
That’s part of what’s makes the search for a new home so frustrating for first-timers.
“We were just shocked. We thought we’d have our pick,” Ryan Anderson said. “Every time we’d get out-nudged. It was like a feeding frenzy.”
The couple was out-bid on six homes before finally being able to purchase one — which had 17 offers on it as well.
It’s that increase in interested buyers, along with closed transactions (up 5.1 percent over last year), that has many Realtors and lenders thinking that the market might be stabilizing. “What I do see in some of the sold data for 2009 is a stabilization for things,” Sherman said. “From listed to sold, there is an increase for ’09. That’s in direct relation to the foreclosures.”
The number of closed home sales in March of 2008 was 27, compared to 46 for March 2009. Sales did soar higher throughout the middle of 2008, peaking at 89 in September. But greater numbers are typical for that time of year, according to Paul Mertz, another Lodi-based Realtor who owns the Mertz Company. Given that logic, sales for the same months in 2009 should reflect that upward trend.
Good news for the real estate and mortgage lending industries, but not so good for potential buyers. In March of last year there were 434 houses on the market — but only 257 this March.
“We’re supposed to get an influx of bank-owned properties,” Mertz said. “I haven’t seen it yet.”
“When prices get to be 50, 60, 70 percent off, you get a lot of buyers in the market,” said Steven Hook, of Residential Pacific Mortgage. “The challenge is that not all the markets have seen those declines.”
Hook lives in Lodi and works between here and San Francisco. He said that a majority of properties in the Bay Area haven’t come down in price like they have in San Joaquin County, causing buyers to hold off an making bids.
And if a family — with good credit and at least 3.5 percent for a down payment — is fortunate enough to find and secure that new home, they could pay less than most people rent for these days, says Ray Waechter of Realty World in Lodi.
“If a couple is living in an apartment, paying $800 (a month in rent), we can get them a condo for less than $800 a month,” Waechter said. “If they’re living in a 3-bed 2-bath for $1,200, we can get them a house to buy for less. Probably $1,000 or 1,100 (a month).”
Waechter said he could see prices getting somewhat lower, but felt interest rates wouldn’t stay this low for long. “It’s time to pull the trigger,” he said.
However, the trick seems to be finding the target. For families like the Andersons lucky enough to find and purchase a home this year, the key seems to be sticking with it.
“We got frustrated and (our Realtor) Larry Underhill said, ‘Stick with it,’” Ryan Anderson said. “We learned ... patience and persistence.”
Contact Business Editor Marc Lutz at marcl@lodinews.com.
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edumacation wrote on Apr 7, 2009 10:09 AM:
Please tell us WHO told us that the house was worth $288,269 last year.
Was it those same people who today scream "BUY NOW while house prices are still low"?
It took a BUYERS AGENT and a SELLERS agent to close those deals.
Realtors are supposed to be PROFESSIONALS who "know" real estate prices. WHY WERE THEY ALL WRONG THEN?
Why aren't they all wrong NOW?
What were these same professionals telling us about that SAME HOUSE price in 2005, 2006, and 2007?
What excuse will they give us for being wrong this year on the price. They only risk losing a commission. Buyers including conventional loan types, risk losing their entire life savings on an impled promise, a hope, and a dream weaved by others.
We need mortgage interest rates to increase to cover the risks.
Consumers should cut up their credit cards and be careful shoppers.
Consumers need household budgets that includes saving. "
edumacation wrote on Apr 7, 2009 9:50 AM:
Since World War II many commercial banks have pretended that SAVING was a good thing. That was before the Bank Glass Steagall Act of 1932 was abolished by President Clinton.
Our economic house of cards was caused by REAL ESTATE SPECULATION. Many think that our economy is till on the "high side" of the bubble.
Just yesterday, national normally liberal, newspapers such as the Huffington Post and the Chronicle have been assailing president Obama for supporting factors that caused the bubble: His goals: KEEP HOUSE PRICES HIGH, keep bankers solvent--or make them look solvent by terminating mark to market accounting. You think this dump is really worth $700,000, enter that on your ledger.
We can each help OURSELVES during this economic downturn by SAVING SAVING AND MORE SAVING. Cut out all non-essential purchases. In many cases, its a TERRIBLE time to buy a house. MORE DEBT is not wealth! Who ALWAYS makes money when you buy or sell? "
edumacation wrote on Apr 7, 2009 9:28 AM:
"We got frustrated and (our Realtor) Larry Underhill said, Stick with it, Ryan Anderson said. We learned ... patience and persistence.
There is one MORE important factor. SAVING and prudent buying. Even Realtors will tell you to "cool it" with credit card use---but they have their own reasons--so you can qualify for MORE debt via a mortgage, usually through a government GSE or FHA program.
To Larry Underhill: Please answer these questions.
How much percent do you think a family SHOULD save to protect their future during this RECESSION?
Do you recommend 5%? 10% 30% savings per year? Do you advise your buyers to have a savings and spending budget so they can "afford" to be in MORE DEBT through a mortgage? Why isn't that in loan calculators for Debt to Income Ratio or DTI?
Many consumers rationalize NOT saving because the banks are paying almost no interest on savings. Why are interest rates for banks to borrow money almost zero, yet consumers can pay up to 60% APR on bank credit cards? Why aren't banks paying consumers reasonable interest on savings deposits? "
edumacation wrote on Apr 7, 2009 9:11 AM:
A Realtor/mortgage company promoted myth is that a typical family should be able to pay 1/3 of their income OR MORE on shelter. This makes NO sense!
Anyone who is involved in finance will tell you that most people have too much debt and not enough savings!
Investments from Pension plans and 401 K's have lost from 30-60% on the last housing bubble. Wall street bankers killed most of our retirement plans! We can not trust anyone but ourselves to be responsible for our own future. The government and the banks are doing everything possible to keep house prices inflated. This is anti-family.
At a personal level, the path to financial responsibility is through prudent spending AND saving. Each one of us should be saving a minimum of 24% of gross income. In the past, saving 12% was the norm. If you pay 30% OR MORE of gross income for shelter, how can you save 24% for future job loss, retirement or illness?
The mortgage calculators don't include personal SAVINGS WHY? "
edumacation wrote on Apr 7, 2009 8:53 AM:
Ryan, you know better! Realtors always claim that "affordability" means affordable monthly payments. Everyone else defines affordability as COST.
Would you buy a new car loaded with everything for only $200/month? NO! Because you know that in a short time you would owe more than the car is worth.
REAL Affordability is COST and VALUE.
QUESTION FOR RYAN--answer?
In your experience, what will happen to house prices when interest rates get back to normal? Remember your definition of affordability! House prices MUST COME DOWN. Todays CNN reported that government surveys showed that 40% of all businesses expected to either reduce salaries or have no increases (exceptions are for bank bailouts and Realtors).
Many of us prudent buyers are praying for mortgage interest rates to increase! Why is that? It will force down the rediculously high house prices we have today.
The cost of building NEW is under $65/sq ft. A NEW 1600 sq ft house sell LESS than $105,000---and the builder makes a profit! "
Jerry wrote on Apr 2, 2009 4:44 PM:
Before all is said and done, California is going to have 12% unemployment. Those that are unemployed will lose their house. The banks will take em' back, swamp the market and affect the values (as in send them down another 10%)...sorry gang.
However, I agree with those who say if you look hard enough you can find a deal. However, you must be qualified and ready to move at a moment's notice. "
Jaysam1 wrote on Apr 2, 2009 1:03 PM:
scottie wrote on Apr 2, 2009 12:02 PM:
Mother of Three wrote on Apr 2, 2009 11:32 AM:
M2CW wrote on Apr 2, 2009 10:25 AM:
Congratulations on you recent tax deduction! Hope you have many wonderful years there! "
patton1 wrote on Apr 2, 2009 9:50 AM:
Journey wrote on Apr 2, 2009 9:01 AM:
liz wrote on Apr 2, 2009 8:53 AM:
jramagic wrote on Apr 2, 2009 7:58 AM:
kayakgirl wrote on Apr 2, 2009 7:13 AM:
Enjoy! "
Comments on this story are now closed.