'When I Give Them the Price, They Get Really Quiet'

From the Modesto Bee:

Record numbers of homes are sitting vacant awaiting buyers in the United States. An estimated 2.1 million empty houses were listed for sale during October, November and December. That's about 62 percent more than usual, according to U.S. Census Bureau statistics.

The glut of vacant houses is readily apparent throughout the Northern San Joaquin Valley, as bank foreclosures and former rental homes flood the for-sale market. Empty houses cause hardship for owners, who often struggle to pay mortgages and upkeep costs on property they can't sell.

For 10 months, Harold and Donna Suender have tried to sell their empty Salida house. When they put the 2,305-square-foot home on the market in April, they priced it at $515,000. But the slumping real estate market has forced them to repeatedly lower their price. This week, they dropped it again to $399,996.

"I've never seen anything like this," said Harold Suender, who bought a new home in Riverbank before the market turned. "That (near 20 percent price reduction) is a lot of money, but we have to get it sold. We can't cover two house payments forever."

The Suenders had hoped their Salida house would help fund their retirement. They bought it in 1994, then moved out in 2003. They rented out the four-bedroom house for three years, getting as much $1,650 a month.

But their renter moved out shortly after the home went up for sale. So no money is coming in, and the Suenders are paying for landscape and cleaning services to keep the house in top condition to attract buyers.

"Probably the smartest thing to do is try to rent it again, at least until the market comes back up," Suender said. "But I don't know how the rental market is now."

The answer to that is: Not good.

"The rental market is very soft and very tough right now ... and it's deteriorating," said Paula Leffler Zagaris, who leads Liberty Property Management, which handles about 1,500 rental homes in the Northern San Joaquin Valley.

Zagaris estimated that a home in Salida such as Suender's now would rent for about $1,250 a month. She said that's because so many homes that have lingered on the sales market have started flooding the rental market.

Conversely, since the oversupply of rental property has pushed down rents, many former rental-home owners are trying to sell instead. "I get at least five or six calls a week from investors who want to know how much their rental home is worth. Then, when I give them the price, they get really quiet," said Mary Prieto, a Prudential California Realty agent who sold 80 homes in Stanislaus County last year.

Prieto said nine of her current 28 listings are vacant homes. Some are former rentals, but most are houses owned by people who bought elsewhere and since have been unable to sell.

Another reason behind the surge in empty homes, Prieto said, is the region's rapidly increasing foreclosure rate. "I would say more than half the vacant homes on the market are owned by banks that have repossessed them," Prieto said.

Also from the Modesto Bee:

A developer that had hoped to build a 3,000-home community on more than 850 acres northwest of Riverbank no longer is interested. Grupe, a Stockton-based developer, had agreements to buy the acreage to build an upscale community called The Bridges....Grupe also is no longer interested in paying for the city's general plan update. It already was paying toward a promised $400,000; the entire plan was expected to cost $500,000.

"Whoa. Whoa. Whoa. I thought Grupe was going to pay for it whether they built or not," Mayor Chris Crifasi said at a City Council meeting this week.

That was the plan, but Grupe could terminate payments anytime, company Chief Executive Officer Kevin Huber said by phone Wednesday..."That's why I like the city to rely on itself for things like this," Councilwoman Virginia Madueño said.
...
Grupe pulled out last week, citing concerns about a slowdown in the housing market, said Riverbank Community Development Director J.D. Hightower.