Back to the future home prices
contracostatimes.com
STOCKTON — Real estate bargain hunters in Stockton can buy property for less than the sticker price of a Cadillac Escalade in today's market.
San Joaquin County real estate listings contain at least two dozen homes priced less than $50,000 and at least one as low as $15,900. These are prices not seen in California since the 1970s, a decade in which home prices climbed from $23,000 to $84,000.
The median home price in the county peaked at $425,000 in the fourth quarter of 2005. The county's median home price at the start of this year had dipped below $200,000.
Most of today's Stockton bargains, all coming as part of a wave of foreclosures, will be scooped up by investors. However, a first-time home buyer who has patience, persistence and a well-equipped tool belt has new opportunities, real estate experts say.
Market newcomers be warned: These homes come with problems that can't be covered with paint.
n"‚Some have been stripped of all appliances and fixtures.
n"‚Others have electrical wiring that has been tampered with.
n"‚Still others have plumbing problems.
n"‚And, in some cases, squatters have made the vacant properties home for months at a time.
"An investor who knows and understands real estate will walk into these homes and know what they're getting," said Jack Mossman, a Realtor with Keller Williams Realty in Stockton. "They will know what it will cost to hire
contractors and will know quickly if the investment pencils out."
The city's least expensive listing is a north Stockton home on the 500 block of Cabana Way, a neighborhood that Keller Williams agent Imran Poladi calls a "challenged area."
The challenges include poverty and a high crime rate.
The 1,300-square-foot house is priced at $15,900, a 92 percent discount from what property records show as a $180,000 selling price in August 2005.
Whoever buys this property, however, will have to make an offer sight unseen. The house is completely boarded up.
"On a property like this, the buyer will make an offer pending inspection," Poladi said.
Most of the potential bargains, however, are still at least twice the price of the house on Cabana Way.
Poladi is the listing agent for 2333 W. Willow St., a three-bedroom, one-bath house west of Pershing Avenue listed at $49,900.
Externally, the home appears structurally sound and has a manicured lawn, rose bushes and a large backyard. These features helped the home's previous seller fetch $288,000 in May 2006, at the heart of the housing boom.
Step inside today, however, and prospective buyers are hit first with the smell of urine, an odor likely left by squatters with pets.
Also, take a cautious step through the front door, because there is a major slant in the living room floor. The western corner of the house dips due to poor drainage. For further evidence, the living room window is bent into the shape of a parallelogram.
"The buyer is going to have to spend some money to remodel and fix the slant in the floor," Poladi said. "But to an average FHA buyer or a skilled investor, this could be a huge deal."
There are other deals to be had.
For the price of a low-end BMW sedan, $34,900, a home buyer could snag the foreclosed home at 1727 School Ave. The two-bedroom, one-bath house is almost 1,100 square feet on a tree-lined street.
The house will need some major patchwork and paint both inside and out, but its wood and tile flooring could be seen as an enticing feature for future occupant. The house could easily be a rental.
Once it's purchased and repaired, an investor might turn to a property manager such as Norbert Huston, owner of Huston Associates Inc.
Huston said his office is seeing a spike in clients who are fixing up rental properties.
"One client of mine basically discovered Weston Ranch, where he could buy for excellent pricing, and the rents can cover his debt service," Huston said, describing an area full of foreclosed-home opportunities.
Other investors are more cautious.
"If I were a younger person, I'd go for it and see what happens," said Stockton investor Frank Vetter, who is in his 50s. "For me, though, I'm worried the (rental) market is going to be oversaturated because so many people are investing."
However, when buyers see a two-bedroom house such as 1529 S. Oro Ave. listed at $23,900 — the price of installing a backyard in-ground swimming pool — it can be difficult to pass up. The house sold for $165,000 in June 2005.
The Oro Avenue dwelling is a tiny 650 square feet. Dual-pane windows and newly installed cabinets are a good start on restoration.
"Realistically, there's a lot of opportunity to get a great return on your investment," Mossman said.
Experts say these bargain homes come with risks, but smart investors willing to make improvements and wait for a market uptick may have discovered the silver lining in San Joaquin County's foreclosure cloud.
Stockton has made national headlines as the epicenter of the national mortgage meltdown. And home values are depressed as one consequence. Most homeowners are equally depressed as they've had to reassess their equity.
But for some, the dramatically lower prices have meant unexpected opportunity in an unprecedented housing market.
Contact reporter Keith Reid at (209) 546-8257 or kreid@recordnet.com. |
