Realtors are starting to see a rapid rise in California's housing market. Homes sales jumped 83% in February compared to the year before, according to the California Association of Realtors.
Sally Ortega has noticed. "We find a house that we like but there’s three, four, sometimes up to 8 offers on a property," she stated, while house shopping. Ortega is looking for a potential first time home for her son.
Bargain basement prices are generating a feeding frenzy from buyers. Tracy realtor Debbie Monceaux is showing a home in Mountain House (San Joaquin County) that used to be worth $640,000, that is now listing for $355,000, a discount of nearly 45 percent.
"But across the board, more people are purchasing homes regardless of the nature of the community," noted David Stark of the Bay East Association of Realtors. "Whether it’s an urban community or a suburban community, people are just flat out buying more homes."
That's especially true in Mountain House, a Bay Area bedroom community once known as the underwater capital of the country.
Last year, 90 percent of the borrowers living there owed more than their home was worth.
But now home sales have nearly tripled and Mountain House seems to be at the epicenter of a recovery that could reverberate across California.
In fact, home sales there are heating up so fast that some realtors are actually starting to use a term that hasn't been heard in years: bidding war.
"Oh yes, we’re getting multiple offers on our houses," gushed Debbie Monceaux of Regency Real Estate in Tracy. "We’re getting a lot of buyers through. The average buyer I think is writing about 3 or 4 offers on a house before they get one."
And there are plenty of reasons.
"First time home buyers can get a very competitive interest rate," observed Pat Huffman, president of the Bay East Association of Realtors. Interest rates are below five percent in some cases, but the biggest factor is affordability.
Just ask potential buyer Sally Ortega. "I think the prices are so incredible right now," she said. "A lot of people who thought they couldn’t afford it a couple of years ago now are able to buy a home."
That's because so many foreclosures flooded the market that prices had to drop. But now it appears that prices may have bottomed out. Your best bargains, according to the California Association of Realtors, are in Merced County, where single family home sales jumped 204% compared to last year, followed by San Benito (200%), Monterey (179%), Solano (178%), Riverside (122%) and San Diego (121%).
In the Bay Area, the hot spots include Pittsburg with a nearly 400% spike in sales activity, going from 25 units sold in February 2008, compared to 124 units in February 2009. Richmond's numbers rose 285% (from 33 units to 127 units ) during that same time span, while sales in Hayward were up 189% (from 38 units to 110). And there's good news for Oakland, with a 126% increase in sales over the same 12 months (from 93 units to 210 sold), according to the Bay East Association of Realtors.
The bottom liine is, this may be the best time to buy a new home in years.
Or as realtor Debbie Monceaux put it, "If you're renting, why pay someone else's mortgage?