Frustrated Stockton Real Estate Buyers

What They're Selling For is More Than They're For



By Bruce Spence
Record Staff Writer
July 21, 2008 6:00 AM

The housing downturn, now permanently embossed with a "foreclosure" icon, is offering many the chance to buy when only a few years ago soaring prices had put owning a home well out of reach.

For many, buying a home still seems out of reach these days, although for different reasons.

J.P. Wheeler, a 31-year-old elementary school teacher, and his wife, Amanda, a Social Security claims representative, have been actively looking to buy their first home, going out to house hunt once or twice a week for the past four months.

Most houses on the market are foreclosures, and that's where the best possible prices appear to be, he said.

But there are also lots of people who see this as a good time to buy, he now knows.

The two have made offers - all over asking price - on three houses and have yet to get any of their offers accepted.

Their most recent attempt involved competing with five other potential buyers making their final, best offers on a 2,000-square-foot house listed at $280,000 in the Brookside area of north Stockton.

The Wheelers came in second with an offer of $335,000 - 20 percent above the asking price.

"I don't like to count my chickens before they hatch, by any stretch, but I thought that was a very aggressive offer," J.P. Wheeler said. "I was surprised it didn't come to fruition. ... It makes you scratch your head, wondering what more you can do."

Frustration perhaps best defines the feeling, he said.

"Definitely not anger," he said. "I understand banks are trying to make money, and I'm trying to get a deal."

Stockton-area real estate brokers and agents say that has become a common experience in recent weeks because of increasing competition among would-be buyers since banks began cutting prices on foreclosure holdings late last year, and sales have jumped five months in a row.

The dominance of foreclosures in the home-sales market had driven down prices brutally.

The median selling price countywide has declined from a peak of $425,000 in July 2006 to $220,000 last month - a 48 percent drop over two years and the lowest monthly selling price level since April 2002, according to figures from the latest Grupe-TrendGraphix monthly sales report, based on Multiple Listing Service data.

The competition often feels intense and initially surprises would-be buyers, leaving them feeling as if they're in a bidding war, agents and brokers said.

"This is a really strange time," said Lela Nelson of Lela Nelson Realty in Stockton. "We've never experienced this kind of market before."

Cynthia Ruiz and her partner, Jesse Alonzo, recently bought a three-bed, two-bath foreclosure home in Stockton that they were able to get for $220,000, and they're happy, because they got a good deal.

But Ruiz said foreclosure property prices seemed to be set artificially low to boost competition and drive up offers. For example, the couple made an offer of $215,000 on a house initially listed at $185,000 but got outbid - a frustrating experience, she said.

"The starting prices are real attractive, but what they're selling for is more than they listed it for," Ruiz said. "It's very misleading."

Mian Quddus, a Santa Clara man who took a foreclosure bus tour in Stockton this past spring, had been eyeing houses in hopes of finding a good deal as an investment and, later, a retirement home. He found a couple of properties he liked but decided not even to make offers, because he heard there were already a lot of people lined up wanting to buy.

"So it didn't feel right going for it," he said. "I really didn't want to get into a bidding war."

Even the professionals looking for a deal are getting frustrated competing for foreclosures.

Jerry Abbott, president and co-owner of Grupe Realtors, Stockton, has been scouring the area for a good foreclosure house on behalf of his son and daughter-in-law.

He's looking in the $300,000 to $320,000 price range and offering $350,000 minus $9,000 closing costs, but the competition is so fierce that he's netted nothing with 10 offers, and three more are pending.

"I'm just writing offer after offer for them, and we can't get anything," he said. "There are a lot of people looking to buy in that price range, because those homes sold for up to $700,000 only a few years ago."

Sylvia Wong of Sylvia Wong Realty in Stockton represents several banks selling foreclosure properties in the area.

They usually set the price pretty low to encourage multiple offers, and it works all the time, she said.

Wheeler said he and his wife intend to keep looking for that very nice house at a very nice, reasonable price - an affordable home where they can raise a family.

"We're just going to keep plugging along, try not to get too frustrated and know something's going to shake loose for us," he said.

Contact reporter Bruce Spence at (209) 943-8581 or bspence@recordnet.com.

"Used with permission from The Record, a division of Ottaway Newspapers, Inc."

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