The Ceres real estate market has picked up since the holidays - according to one established agent - as new construction continues in some unfinished Eastgate subdivisions.
The region - like the nation - continues to recover from the foreclosure crisis that started depressing market conditions in September 2008 and turned some McMansion neighborhoods into ghost towns. Rates of default continue to slow down. December represented the 36th month of continuous year-over-year declines in the inventory of foreclosed homes, including 21 consecutive months of declines greater than 20 percent.
According to CoreLogic, a company that monitors foreclosure rates, the foreclosure rate for the Modesto area was 0.64 percent in October, a 0.30 percent decrease from the October 2013 rate.
Likewise, the 90-day delinquency rate for mortgages is also dropping. In Stanislaus County, 90-day delinquency rates stood at 2.53 percent in October, compared to 3.73 percent in October 2013. That was still higher than the statewide delinquency rate of 2.10 percent for the same month.
"While there has been a large improvement in the reduction of foreclosure inventory, completed foreclosures remain high and serve as one of the obstacles to new single-family construction," said Sam Khater, deputy chief economist for CoreLogic. "Until the flow of completed foreclosures declines to normal levels, new-home construction will not pick up because builders have little incentive to compete with foreclosure stock."
Eric Ingwerson, the office manager of PMZ Real Estate in Ceres, said the market slowed down in November and December but in the last eight weeks he's personally had eight properties go into the pending sale phase.
"For me it was still busy but the market as a whole kind of slows down for the holidays but it's already picked up for us," said Ingwerson.
Selling is brisk for Ceres properties under $250,000, he said.
Prices paid for Ceres homes jumped dramatically between 2013 and 2014. In all of Ceres and parts of south Modesto, medians selling price at the end of 2013 was $130,000. By the end of last year that number shot up to $209,000, a phenomenon he said was "pretty astonishing."
Sales slowed a bit between the two years. In 2013 there were 635 Ceres area market houses sold with 597 sold in 2014.
"There were less units sold in 2014 but the volume was over $13.5 million higher in 2014," said Ingwerson.
Houses sold faster last year compared to the one before. During 2013, the average time that a Ceres home spent on the market was 41 days; in 2014, that average came down to 39 days.
The year will be a good one, he predicts, with the market still remaining in the buyers' favor. He believes price may increase three to five percent between now and December because the market will be active.
"In the first half of 2014 and through the summer, sellers were getting what they were asking and more. There were multiple offers on listings. That has dropped off and buyers are offering less so we have trended from a seller's market to a buyer's market. If the sellers don't meet their needs, they say, fine, we'll go down the road and see if we can find something else."
Buyers are benefitting by very low interest rates; in some cases an FHA loan at 3.875 percent.
Most all of the sales the local PMZ office are seeing are priced at $300,000 or less with Eastgate selling and more than $300,000.
New construction is still somewhat scant in Ceres. In 2012 the city of Ceres processed no permits for buildings of single-family residential units. That number climbed to nine in 2013 and 50 in 2014.
Most of the new residential construction is taking place in Eastgate, Ceres' easternmost development, where subdivisions approved before the mortgage crisis hit but never finished are back in construction mode.
Tom Westbrook, director of Community Development for the city of Ceres, said construction is continuing in Florsheim Homes' Bing Cherry Estates subdivision, which was approved in 2006. The company had 39 unfinished lots sitting idle but have completed more in the last year south of Hatch Road and west of Eastgate Boulevard.
Kiper Homes is also building The Corners at Eastgate, which are being sold through Multiple Listing Service. Construction permits have been issued for 18 homes range from 2,023 to 2,248 square feet.
Interest is picking up to finish other projects that were chilled by the mortgage fiasco and resulting recession. One of those areas includes Northwood Heights off of Evans Road where building halted years ago. A total of 14 permits to build have been issued for the project.
Building is also occurring at The Terrace at Dow Ranch on Richard Way. Several years back the 46-lot project was approved for separate phases of 25 and 21 homes. Nine units are under construction, said Westbrook.
The city is also processing applications for the construction of approximately 79 lots in Westpointe #4 subdivision represented by the large vacant field south of Whitmore Avenue and west of Malik Drive.
Westbrook said that an infill project of approximately 37 homes off of Hackett is also being discussed.