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Tracy Press

Bloated housing market in Tracy is a pain for sellers.

A record number of "for sale" signs line the streets in Mountain House and Tracy.

Eighty homes in Mountain House and 971 homes in Tracy are elbowing to stand out in the crowded market. And sellers and real estate agents who compete with housing developers and banks for buyers have cut prices and turned to unique methods to sell.

The number of homes for sale dipped slightly in late 2006 before it began a steady climb in February.

That has real estate agents advising sellers who can’t wait the average 65 days to sell a home in Mountain House and Tracy to get creative in marketing and prepare to drop their prices.

Some real estate agencies and sellers have turned to Kimmie Pitcock at First Impression Home Staging and Design for help. She spruces up one home a week and takes several calls each week from sellers desperate to stand out in the market.

"With this market and record number of homes, sellers are getting a little desperate and trying different strategies," said Annabelle Ramirez, a real estate agent with RE/MAX in Tracy. "The strategy is about pricing now."

The few homes that sell each month have either low price tags set by housing developers or homeowners who can afford to drop their price. Or they’re houses that have been foreclosed.

Manuel Fabriquer hung a "sold" sign in his yard Saturday after it sat a month on the market. Pacific Auction Exchange out of San Jose auctioned off the 3,011-square-foot home in southern Tracy for a price between $550,000 and $610,000. Fabriquer had bought the house for $400,000 in 2001.

"Because I had enough equity in it, I could afford to be flexible in my pricing," he said. "Now, I’m just happy to be done."

Dipping prices and plenty of homes to choose from have done little to attract buyers during the past year. About five homes sell in Tracy each month.

"People are waiting for the bottom to drop out before they buy," said Christine Lynch with Preferred Real Estate Group. "The prices will rise soon. It’s a fantastic time to buy right now."

The market has pushed many local real estate agents out of the business and into other jobs, according to Neil Metal with Metal and Brooks Preferred Real Estate Group.

"As a whole, most of your agents are dying out here," he said.

He says his office has been saved by a deal with KB Homes to market and sell homes in Lathrop, Stockton and Merced.

Metal advises potential buyers to wise up and take advantage of the market.

"You can find the same home in the same neighborhood for a significantly different price," he said. "Look around."

Lynch blames the spike in the number of homes for sale not on the stagnant market, but on too many eager buyers.

A lot of people who bought homes three or five years ago signed on to loans that offered low interest rates for just two years, Lynch said. Once the interest rates rose, as according to the terms of the loans, owners saw their monthly payments soar.

As of Monday, Fannie Mae Foundation requires potential home buyers to qualify for a principal payment plan and an interest payment plan even though the buyer might only sign on to an interest payment plan, which means monthly payments only deduct from the interest.

"This is the banks’ way of helping people not get into a bad situation down the road," Lynch said. "California’s market will bounce back. It’s just a matter of time."


reports on


California mortgage defaults rose to the highest level in a decade in the second quarter as falling home sales and higher interest rates battered the housing market.

Homeowners received 53,943 default notices, more than double the 20,909 filed a year ago, DataQuick Information Systems, a La Jolla, California-based provider of real estate data, said today in a statement. Last quarter's default level was the highest since the fourth quarter of 1996, when 54,045 notices were recorded in California.

Californians are struggling to repay their home loans as mortgage rates jumped to an 11-month high, and tighter lending standards limited their ability to refinance. Southern California home sales last month slumped 36 percent to the lowest level for a June in 14 years and San Francisco Bay Area sales fell 26 percent to a 12-year low, mirroring the national slump, DataQuick said last week.

Most of the loans that went into default in the second quarter were originated between July 2005 and August 2006. Loan originations peaked in August 2005. At the top of the market, when price appreciation rates topped 10 percent, lenders let many households stretch their finances beyond what they could afford, DataQuick said. Those borrowers are now at risk of default.

`More to Come'

``We're going through a lot of that activity,'' DataQuick analyst John Karevoll said in an interview. ``There's more to come.''

The number of default notices sent to homeowners in California, the most populous U.S. state, has averaged 34,172 quarterly since DataQuick began tracking the data in 1992.

Default notices are the first step in foreclosing on a home. Such notices in the second quarter rose 15 percent compared with the previous three months. About half of homeowners stop the process by catching up on their payments, refinancing or selling their homes to pay down debt, DataQuick said. A year ago the figure was 88 percent.

The number of defaults resulting in foreclosures is the highest since DataQuick began keeping records. The previous high was in early 1994, when about 30 percent of defaults resulted in foreclosures, Karevoll said.

Only 55 percent of homeowners are able to avoid foreclosure because a greater number now have multiple loans on their properties. In the past, when a homeowner had just one mortgage, the lender would often allow the borrower to sell the home for less than the amount owed on it and take the loss, known as a short sale, Karevoll said.

``They can't do it that way anymore because the primary lender can't tell the secondary lender, `We'll take all of the sales price here and you get nothing,' '' Karevoll said.

The rate for a 30-year mortgage was 6.73 percent for the week ended July 19, up from 6.15 percent two months earlier, according to Freddie Mac.

To contact the reporter on this story: Daniel Taub in Los Angeles at dtaub@bloomberg.net .
Last Updated: July 24, 2007 13:57 EDT


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