Though local real estate agents speculate that the price increase will be an ideal change for the city and the county, buyers will be left with a lack of inventory, which poses problems for first-tie buyers or low-income families.
“We simply do not have the inventory for entry-level homes,” said Rhonda Wheeland, a broker in Patterson for Realty World-Schueber & Arendsee Properties. “Qualified buyers who have $150,000 or less are sitting and waiting for a home. What is interesting is that many of these people are young and grew up in Patterson. It’s sad because this is our future, and we are unable to provide them a home.”
In March 2012, a 2,429 square-foot home off Walker Ranch Parkway and Sperry sold for $180,000. As of May 10 2013, the same home is listed at $242,900, according to MetroList Services.
Start-off homes are becoming even harder to find this year. First-time buyers or low-income families looking for a home that is less than 1,700 square-feet cannot be found.
“This year to date, only 20 out of 112 homes have been sold for under 1,700 square-feet,” Wheeland said. “There is a lack of inventory, and that is why the price of homes are going up.”
According to Stanislaus County records, 503 homes were sold at a median price of $169,900. At a distance, the price is lower compared to Patterson, but Wheeland says the homes are also smaller in comparison.
“Modesto has more properties compared to Patterson,” Wheeland said. “Their homes sell for less because their median home size is 1,582 square feet. Patterson no longer has homes for sale that size, so the price must go up. Yes, it’s true that Patterson homes are rising in price, but that’s because we are out of resources.”
One listing price off of Cliff Swallow Drive in Patterson was originally listed for $150,000, but because of an overwhelming amount of contenders, sold for $168,000 on April 10.
“We are seeing a lot of investors flipping, holding homes or renting them out. There has been an increase in investment purchases with cash, and cash prevails,” Wheeland said.
Homes that were originally listed from $69,000 to $250,000 in April sold for $5,000 or more above the initial asking price, according to MetroList Services. There are generally 10 to 18 offers on any given house, so bidding wars are becoming frequent, Wheeland said.
Cash and conventional payments are also becoming the norm,while Federal Housing Administration (FHA) and Veteran Affairs (VA) buyers are unable to compete for homes, Realtor Naomi Jacobson said.
But why the sudden interest in Patterson? Many speculate that the increase of sales is directly linked to the new economic opportunities or positions associated with a fulfillment center for Amazon.com that is slated to open in town later this year.
This may be true in certain instances, but Wheeland said she has received calls from potential employees out of state, and they are more inclined to rent a space before they set up homes.
“I think they just want to get a taste of what Patterson has to offer instead of deciding right away,” Wheeland said. “My opinion is that you’ll see an increase in rentals before home sales.”
The same cannot be said for most Bay Area families from San Jose seeking a home in Patterson, which is relatively cheaper compared to other homes in that area, said Sonja Jarvis, lead agent for Kiper Homes.
Kiper Homes’ Mahogany development in Patterson Gardens has had much success, with 38 of 46 lots already sold since they began going on the market in mid-2012 and 23 of those homes already occupied.
Though some Bay Area families would also opt for another Central Valley city with lots of commuters, such as Tracy or Manteca, prices in those places range from $235,000 to $440,000, according to MetroList Services.
Regardless of the buyer’s reason, some out-of-towners are opting to make Patterson their home. Estimates released May 1 by the California Department of Finance show that Patterson’s population has grown by 236 people between Jan. 1, 2012 and Jan. 1, 2013 to 20,846 — a 1.1 percent increase.
At the same time, Patterson maintains the highest vacancy rate in Stanislaus County, with 11 percent of its 6,356 residences unoccupied as of January, according to the state finance department.
Broker Greg Nunes of Greg Nunes Realty is wary that the price increase will take a turn for the worse as it did in 2007 if buyers are not cautious of teaser loans. Homes that were originally going for more than $500,000 in 2006 started selling for roughly $150,000 in 2007.
Nunes believes the secret to keeping a home is to buy within one’s means instead of what someone may be pre-qualified for.
“I think it would be important to work hard to raise your credit scores, meet with a reputable lender and get prequalified for a home,” he said. “When the right home comes along, they’ll be ready.”
• Contact Brooke Borba at 892-6187, ext. 24 or firstname.lastname@example.org.