Foreclosure in Fresno>Question Details

Ken Bui,  in San Jose, CA

Is it a good time to buy in Fresno and Stockton with all the foreclosures there ?

Asked by Ken Bui, San Jose, CA Thu Jul 19, 2007

Stockton leads the nation in foreclosures (last I heard). Would anyone recommend buying an investment home there now for resale in 5 years ?

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There are some difficult issues with those Central Valley markets. Looking at what the major home builders are doing is interesting. They let expire many option money deposits on land slated for home development in the last year. These same land tracts are now in play again. Companies like K&B, Horton, Toll Brothers, etc are negotiating acres to buid new home developments to coincide with a better real estate market in a couple years. Fresno and Stockton resale homes will again be competing with new home developments. And this will not change for a very long time. My suggestion, buy retail properties that will support all the home development. Every new family that moves in will need to go to their local Walgreens, Burger King and Hair Salon.
1 vote Thank Flag Link Fri Jul 20, 2007
Mario Pinedo,…, Real Estate Pro in Cupertino, CA
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Ask 15% below asking in Stockton and you will get a confirmed sale.
0 votes Thank Flag Link Wed Feb 27, 2008
No you would be better off to wait because prices are going down each and every month.
0 votes Thank Flag Link Wed Feb 27, 2008
Anytime IS the time to buy real estate... its not a matter of time, but PRICE.

You cant buy low and sell high if the market is going down without waiting a LONG time for the market to bottom and then turn back up.

I would not want to buy the $400k house today that will be worth $300k next year.

One can make a fairly accurate assessment of current market value, but it might be more difficult to determine tomorrow's market value.

If you are INVESTING in a stock, in order to buy low and sell high you need to pay a LOW price for the stock. One of my sons tried to convince me to buy 100k shares of his favorite tech stock - AMD - when it was $69.00 in 2000. I told him that I would not pay that price for the stock and I put it on my watch list and watched it sink all the way down to $3.00 where I was considering buying it - but didn't. (wish i did.) Where is Real Estate any different? In order to buy low - you either need to wait for the market to bottom or you have to have an investment strategy that protects your downside.

WATCH YOUR DOWNSIDE - THE UPSIDE WILL TAKE CARE OF ITSELF

For example:

Property XYZ is on the market for $250k

I think the property would sell for $200k (thats where the retail market is TODAY)

so, if I want to buy low, and I do, I would say in most markets that 65% LTV is a safe offer, so an offer of $135k would be my highest offer. Since the market is spiraling down, today's offer would likely be $100k


so, at $100k I can buy low and sell high. If i go in and pay market price of $200k and it goes down, there is no margin for error.

Having said that - this does NOT apply if I need a house for my family. If I need a house to live in I'm not going to worry about all that - but then again - I'm not viewing my primary residence as an INVESTMENT. If I did then when the value of my house goes up I would sell to take profit, but when you have 6 kids (3 still living at home) you're not likely to yank up stakes just because your house went up a couple of hundred k.

Lazarus
0 votes Thank Flag Link Thu Oct 11, 2007
The best answer probably has more to do with your personal motivation and situation than anything market related. If you can buy below market value and have some flexibility on when you MUST sell, you should be okay moving forward. Putting an absolute date on when it must be sold is not preferred. If you can financially support the home and wait for a more favorable selling climate, that would be the way to go--but nobody knows when and/or how much the market prices will recover. I hope this helps!
0 votes Thank Flag Link Fri Jul 20, 2007
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