Manteca new home starts up 50%!

It isn’t 2000’s torrid pace of 1,074 new housing starts but given the economic conditions Manteca is arguably in the middle of a mini-housing boom with 289 new single-family home housing starts in the first eight months of 2010.

Builders started 60 new homes in August for the best single month in at least six years. It is just over double the housing starts in July when builders began work on 29 new homes within Manteca’s city limits.

Manteca’s 50 percent jump from July to August for new housing starts is in stark contrast to national new housing starts that reflected a 1.8 percent increase going from 559,000 new starts in July to 569,000 in August based on U.S. Department of Housing & Urban Development statistics.
It also is in sharp contrast to California as a whole. The California Building Industry Association reported starts for single family homes in August were down 15 percent from July dropping to 3,598 new starts

Actual housing units that have been completed or started so far this year in Manteca comes in at 341 units when the 52-unit subsidized senior housing complex known as the Magnolia Court apartments that broke ground in January behind Dribbles Car Wash on North Main Street is included in the count.

Manteca is on target to reach the predicted 350 hew housing starts for 2010 that both the city and developers anticipated at the start of the year.

August also marked the first month in nearly three years that Del Webb wasn’t the leading builder in Manteca when it came to housing starts. Pulte Homes started 17 homes at Del Webb at Woodbridge, just one less than at the various Woodside Homes neighborhoods in Manteca. Builders view that as a sign that the non-age restricted market is starting to pick up in Manteca.

New home buyers were looking for small homes back in February 2008 when the typical new home permit in Manteca was for a 1,577-square-foot home. By May of 2008 the average size of a new home being built climbed up to 1,760 square feet.

The typical new home start in Manteca during August averaged 2,396 square feet.

August to August comparisons show in 2009 the average new home cost $148,559 to build and in 2010 it cost $144,679 to underscore value pricing is driving sales. Many Manteca builders, though, are helped by the fact they have already written off the cost of developing finished lots after the housing market stalled. More than 600 finished lots remain giving Manteca at edge in the Northern San Joaquin valley housing market.

Del Webb last month became the first builder in more than three years to break ground on new lots. They are adding 49 lots costing $1.7 million in grading and infrastructure for the phase that extends Del Webb Woodbridge down to Lathrop Road.

The prices for Manteca new home construction do not reflect between $50,000 and $65,000 per home in growth fees and connection charges or the land costs and developer cost and profit.

In 2009, Manteca topped all San Joaquin Valley jurisdictions with 304 new homes built and sold. Next closest was Stockton at 120. Eight new homes were built in Modesto during 2009 while six were started in Tracy based on permits issued by various cities.

By Dennis Wyatt
Managing Editor
dwyatt@mantecabulletin.com
209-249-3532

229 homes started so far this year in Manteca

Manteca is on pace to again lead the Northern San Joaquin Valley in housing starts.

Builders so far in 2010 have started 229 single family homes including three custom homes through July 31. That is in addition to the 52-unit subsidized senior housing complex known as the Magnolia Court apartments that broke ground in January behind Dribbles Car Wash on North Main Street. Housing starts in July numbered 29.

Pulte Homes continues to dominate new housing starts in Manteca as it has for the last 26 months. Seven of the new home starts in July were in the 55 years and older age-restricted Del Webb at Woodbridge community. So far for 2010 almost three out of every 10 new homes started in Manteca have been in Del Webb at Woodbridge.

In 2009, Manteca topped all San Joaquin Valley jurisdictions with 304 new homes built and sold. Next closest was Stockton at 120. Eight new homes were built in Modesto during 2009 while six were started in Tracy based on permits issued by various cities.

As of June, Manteca was 100 ahead of the rest of the Northern San Joaquin Valley in terms of housing starts for far in 2010.

A new builder started their own neighborhood in Manteca in July.

K. Hovnanian Homes purchased the remaining 55 lots in the Anderson Homes neighborhood on the northeast corner of South Main Street and Woodward Avenue last month. Three permits were issued for model homes in July for the neighborhood dubbed Medallion.

They are offering three home designs ranging from 1,886 to 2,358 square feet. One- and two-story homes will be available at Medallion with home prices expected to start in the mid $200,000s.

Resales on pace for 1,140 deals
The new home sales have had little impact on the resale market that is still flooded with foreclosures.

There have been 703 existing homes sold in Manteca this year as of Friday. At the current pace 1,140 resale homes will close escrow by year’s end.

If that happens, it will mark the third consecutive year more than 1,100 existing homes have sold in Manteca.
There were a record 1,211 existing homes sold in 2009 and 1,165 resales that closed escrow in 2009. That compares to 402 in 2007 when the bubble started deflating.

Median prices dropped from a high of $345,000 in 2007 on existing homes to $185,000 today. That reflects just under a $4,000 jump over 2009 prices that bottomed out at $178,000.

Well under growth cap
Manteca has started 281 housing units including multiple family dwellings in the first seven months of 2010.
That means a little over a third of the housing allowed under the growth cap established in 1988 have occurred in 2010 to date.

Manteca’s growth control policy limits sewer connections to 3.9 percent of the total of all housing existing in Manteca as of Dec. 31 of the previous year.

The growth management ordinance does not differentiate between single family homes and multiple unit housing complexes such as duplexes and apartments.

Manteca becoming city of single family homes
Single family homes at the end of 2009 numbered 23,169 in Manteca or 77.9 percent of all housing stock. That is a larger share than 10 years prior in 1999 when there were 16,812 single family homes that accounted for 74.1 percent of all housing stock.
The non-single family homes include apartments, mobile homes, duplexes, and triplexes.

The 29 single family homes started in July have an average construction price of $139,739. That figure reflects only the actual cost of construction. It excludes land, builder margin, subdivision infrastructure, and growth and connection fees.

By Dennis Wyatt
Managing Editor
dwyatt@mantecabulletin.com
209-249-3532

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Manteca bucks trend again as taxable sales continue to gain

Manteca taxable sales grew 0.8 percent in the last four quarters.

That meant the city ended up with $62,059 more in sales tax receipts compared to the same time period in 2009-10 based on state Board of Equalization figures.

It may seem minuscule but compared to other jurisdictions within San Joaquin County – as well as practically everywhere else in California – it was downright herculean.

Consider what was going on with commerce in Manteca’s neighboring cities during that time: Tracy taxable sales down 10.1 percent, Lodi down 11.3 percent, Stockton down 12.8 percent, Escalon down 15.0 percent, Lathrop down 20.5 per cent, and Escalon down 30.0 percent.

California’s taxable sales were off 11.0 percent.

Manteca ended the four quarters with $7,723,216 in sales tax.

“We’re still humming along,” City Manager Steve Pinkerton said.

Manteca has been the county leader in municipal sales tax performance for the past five quarters. The only other jurisdiction the Northern San Joaquin Valley that has had major growth in sales tax in any of those quarters was Riverbank.

Pinkerton noted the numbers included year-to-year numbers for Bass Pro Shops and Costco, two entities that account for roughly 5 percent of all of Manteca’s sales tax receipts.

The gain, though, is tempered by the fact sales tax sharing agreements to land Bass Pro and Costco for Manteca have to be paid. But even so Manteca’s municipal sales tax gains would be 5 percent better than the nearest jurisdiction which was Tracy that suffered a 10.1 percent drop in sales tax. Without Bass Pro Shops and Costco, Manteca also would have had a sales tax drop between 10 and 11 percent or roughly $770,000 in lost revenue in real number by about $385,000 once sales tax deals are squared. That means those two deals saved the equivalent of the full year’s pay of three police officers for an entire year.

As an added bonus, the two stores by simply being in Manteca swelled Measure M tax receipts by close to $400,000 to protect against any additional erosion of supplemental public safety spending generated by the half cent sales tax.

Pinkerton noted Manteca retailers benefit from additional consumer spending powered by the fact the city grew by 1,000 residents thanks to 304 new home sales in 2009. At the same time Tracy added a half dozen new homes and Stockton 120 new homes.

By Dennis Wyatt
Managing Editor
dwyatt@mantecabulletin.com

Home sales top $546M in 29 months

Manteca homebuyers in the past 29 months have spent $546,413,000 snapping up housing deals in the resale market.

If the pace continues to year’s end, Manteca exiting home transactions will hit $611,620,000 during the three years encompassing 2008, 2009, and 2010. That will almost match the aggregate dollar values of existing homes sold within the city limits in the previous three years of 2005, 2006, and 2007.

“There is still very strong demand from buyers out there,” Realtor Tom Wilson said. “The market is undervalued and the multiple offers out there support that.”

Wilson, along with a number of other real estate agents contacted by the Bulletin, had a concern that the end of the federal tax credit of $8,000 for first-time buyers would slow down buying activity in the resale market. It hasn’t.

Wilson attributed that to the fact the market is undervalued and that most buyers understand that.

“You keep reading newspaper stories that say the real estate market is in the tank but it is a great market if you’re a buyer,” Wilson noted.

The amount of money being spent collectively just in Manteca proves Wilson’s point.

Despite a weakened economy and unemployment just under 16 percent, existing Manteca home sales are still attracting the same amount of money that they did during the last three years of the real estate bubble. The big difference, of course, is the price paid per home.

Realtors noted all cash buyers were rare until just three years ago. That means more people are putting their own money into homes while at the same time first-time home buyers who qualify for FHA loans are pushing hard to buy given the affordable market.

Wilson pointed out obtaining a loan is harder than when he started in the business more than 20 years ago. Even so, it isn’t stopping first-time buyers.

Wilson is working with a couple that missed out on the federal tax credit and would like to secure a piece of the $10,000 state tax credit before it expires but they don’t actually need it to make their deal work.

“It would be nice for them to get but it isn’t essential,” Wilson said.

As of June 1, existing Manteca homes that closed escrow numbered 473 for the year. At that pace the total sold by year’s end should hit 1,142 homes. That would make it the third best year ever behind 2009 at 1,211 homes and slightly behind 2008 at 1,165 homes. The fourth highest year for existing resales was in 2002 with 803 homes selling.

Another encouraging sign is the median selling price of those 472 closed deals. It is at $187,460 or where it was at in early April of 2009. The median selling price for 2009 in Manteca was $178,000.

If the trend holds it will mark the first year the median price paid for homes in Manteca has increased since it peaked at $413,000 in 2006.

By Dennis Wyatt
Managing Editor
dwyatt@mantecabulletin.com

Has Manteca bottomed out?

Prices rise slightly after 14 straight quarters of falling...

The median value of homes changing hands in Manteca ended 2.5 years of freefall sometime during the summer of 2009.

Prices peaked in the first quarter of 2006 at $455,000 and dropped all the way to $190,000 in the second quarter of 2009 before bouncing up to $200,000 in the third quarter of 2009 based on data collected by the San Joaquin County Assessor’s Office.

Median selling prices edged back up to $205,941 by year’s end.

The data reflects both existing home sales and new home sales.

That is good news for the City of Manteca as it means property tax assessments aren’t likely to fall again but instead remain flat. Sales tax also appears to be doing the same thing - at least in Manteca - meaning the city’s deficit projection for the fiscal year starting July 1 is likely not to go higher than the previously estimated $3.8 million and could actually be slightly lower when taking all revenue into consideration.

That’s good news as many jurisdictions are expected to see more drop-offs in property and sales tax - the two biggest revenue sources for local governments in California.

The 2009 data provides the critical snapshot on Jan. 1, 2010 for determining tax assessments for the upcoming assessment rolls that are due out in July or August.

It is a significant turnaround from a year earlier when market data used to determine assessments plunged the value of property in Manteca by $500.3 million or a 14.7 percent drop. At the same time Tracy dropped 18.1 percent and Lathrop was down 15.7 percent, Stockton 12.9 percent and Ripon 9.6 percent.

The assessor’s data shows it is unlikely that existing homes under Proposition 13 will be hit this year with a 2 percent jump as allowed under the voter approved imitative since 2009 had negative inflation.

Realtor Tom Wilson noted the assessor’s data reflects what many real estate agents on the frontline as well as local investors believe has happened which is the Manteca market has indeed hit bottom.

“The market is starting to show signs of moving back to normal with equilibrium between buyers and sellers,” Wilson said.

Wilson is among those who contend the current Manteca market is undervalued even by today’s standards. The reason is many of the foreclosures are owned by investment groups and not banks. They do not have a handle on the Manteca-Ripon market and instead lump it into Stockton and Modesto when pricing foreclosed homes.

“This is still a good time for first-time buyers,” Wilson added.

But for how long is anyone’s guess. One carrot - the state’s $10,000 tax credit for home buyers - runs through Dec. 31. Wilson, though, pointed to California Association of Realtors tracking that projects the $100 million will be gone within 45 to 60 days.

“Sometime this summer that tax credit money will run out,” Wilson said.

Wilson cautioned not to expect the market to start climbing anytime soon although he does foresee the strong possibility of an “uptick” in prices to adjust for under valuation as a possibility on the relatively short-term horizon.

By Dennis Wyatt
Managing Editor
dwyatt@mantecabulletin.com
209-249-3532

Manteca adds 1,258 residents during 2009

Manteca had 68,847 residents on Jan. 1, 2010 based on State Department of Finance estimates.

It is the 119th largest city out of 480 in California. It was ranked 51st in numeric growth and 44th in percentage growth last year.

Manteca gained 1,258 residents in 2009. At the current pace the city should reach the 70,000 mark in 2011. That means it will have taken Manteca 11 years to gain 20,000 residents. The city’s population on April 1, 2000 was 49,255. Manteca’s population was 41,632 in 1990, 23,150 in 1980, and 13,824 in 1970.

The city has essentially doubled in population size in 25 years going from 32,545 at the start of 1985 when a 9.2 percent growth rate that year put the city at 34,000 residents sometime during the summer of that year.

Other population estimates for San Joaquin County jurisdictions are as follows:

• Lathrop, 17,969 residents up from 10,455 in 2000.

• Ripon, 15,468 residents up from 10,158 in 2000.

• Tracy, 82,107 residents, up from 56,929 in 2000.

• Lodi, 63,549 residents up from 57,011 in 2000.

• Stockton, 292,133 residents, up from 243,771 in 2000.

• Non-city areas of San Joaquin County, 147,035 residents, up from 130,066 in 2000.

• San Joaquin County overall, 694,293 residents, up from 563,598 in 2000.

The United States Census Bureau today is launching its door-to-door canvas to knock on the doors of households that didn’t mail back their 2010 forms.

Workers will identify themselves with a census ID badge that contains a Department of Commerce watermark. The census taker may also be carrying a bag with a Census Bureau logo. Census workers will not ask for citizenship status, Social Security numbers, credit card or banking information.

If asked, he or she will provide supervisor contact information and/or the local census office phone number for verification. If census workers are unable to reach a household member in-person, they will also attempt contact by phone to conduct the interview with the household member.

By Dennis Wyatt
Managing Editor
dwyatt@mantecabulletin.com
209-249-3532

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2010 Tax Credit for New Home Buyers

Important Update (04/01/10):

The 2010 New Home Credit and First-Time Buyer Credit begins May 1, 2010.

The New Home / First-Time Buyer Credits are available only for purchases that close escrow on or after May 1, 2010.

Applying for the 2010 New Home/First Time Buyer tax credits: Applications must be submitted after escrow closes. The new application will be available by May 1, 2010. We will deny the application if the 2009 form is used or if we receive the 2010 application before May 1, 2010.

Check this page often. We will add updates as they become available.

General Information: These tax credits are available for taxpayers who purchase a qualified principal residence on or after May 1, 2010, and before January 1, 2011. Additionally, these tax credits are available for taxpayers who purchase a qualified principal residence on or after December 31, 2010, and before August 1, 2011, pursuant to an enforceable contract executed on or before December 31, 2010. The purchase date is defined as the date escrow closes.

These tax credits are limited to the lesser of 5 percent of the purchase price or $10,000 for a qualified principal residence. Taxpayers must apply the total tax credit in equal amounts over 3 successive tax years (maximum of $3,333 per year) beginning with the tax year in which the home is purchased. The tax credits cannot reduce regular tax below tentative minimum tax (TMT). The tax credits are nonrefundable and unused credits cannot be carried over.

The total amount of allocated tax credit for all taxpayers may not exceed $100 million for the New Home Credit and $100 million for the First-Time Buyer Credit. However, since many taxpayers will not be able to utilize the entire tax credit, the legislation specifies that the $100 million cap for the New Home Credit will be reduced by 70 percent of the tax credit allocated to each buyer and the $100 million cap for the First-Time Buyer Credit will be reduced by 57 percent of the tax credit allocated to each buyer. We will allocate the tax credits on a first-come, first-served basis.

Only one tax credit is allowed per taxpayer. If a taxpayer qualifies for both tax credits, the law specifies that we will allocate the amount under the New Home Credit.

Taxpayers will not be eligible for either tax credit if any of the following apply:

• The taxpayer was allowed a 2009 New Home Credit.
• The taxpayer is under 18 years old. (A taxpayer who is married as of the date of purchase will be considered to be 18 if the spouse/registered domestic partner (RDP) of the taxpayer is 18 or older on the date of purchase.)
• The taxpayer or the taxpayer’s spouse/RDP is related to the seller.
• The taxpayer qualifies as a dependent of any other taxpayer for the tax year of the purchase.

New Home Credit: A qualified principal residence, for purposes of the New Home Credit, must:

• Be a single family residence, either detached or attached.
• Have never been occupied. Sellers must certify that the home has never been occupied in order for a taxpayer to receive an allocation of the credit.
• Be eligible for the California property tax homeowner’s exemption.
• Be occupied by the taxpayer as their principal residence for a minimum of 2 years immediately following the purchase.

Tax credit allocation:

• A Certificate of Allocation will not be issued if:
  • The seller does not certify the home has never been occupied.
  • We do not receive the application and a copy of the properly executed settlement statement within 2 weeks (14 calendar days) after the close of escrow.
  • We receive the application or reservation request after the total tax credits available have been allocated.
• FTB's determination may not be protested or appealed.

First-Time Buyer Credit: A qualified principal residence, for purposes of the First-Time Buyer Credit, must:

• Be a single family residence, either detached or attached.
• Be eligible for the California property tax homeowner’s exemption.
• Be occupied by the taxpayer as their principal residence for a minimum of 2 years immediately following the purchase.

A first-time buyer is any individual (and the individual’s spouse/RDP, if married) who did not have an ownership interest in a principal residence during the preceding 3 year period ending on the date of the purchase of the qualified principal residence.

Tax credit allocation:

• A Certificate of Allocation will not be issued if:
  • We do not receive the application and a copy of the properly executed settlement statement within 2 weeks (14 calendar days) after the close of escrow.
  • We receive the application after the total tax credits available have been allocated.
• FTB's determination may not be protested or appealed.

Applications: We will accept applications beginning May 1, 2010. Do not use the 2009 application. We will post more information by May 1, 2010.

Reservations: Taxpayers who qualify for the New Home Credit may, but are not required to, reserve a tax credit prior to the close of escrow. Reservations will become important as we near the $100 million cap for homes that may not close escrow before the cap is reached. To reserve a tax credit, the taxpayer and seller need to complete, sign, and submit to us a reservation request to certify that they have entered into an enforceable contract on or after May 1, 2010, and on or before December 31, 2010. A copy of the signed contract must be included with the reservation request. We will post the reservation form and details about the process by May 1, 2010.

If you are only applying for the First-Time Buyer Credit, you will not be able to reserve the tax credit before escrow closes.

Claiming the tax credit:

• The taxpayer must receive a Certificate of Allocation from us to claim the tax credit on their California personal income tax return. The Certificate of Allocation will state the maximum amount the taxpayer can claim listed by tax year.
• The taxpayer should refer to the 2010 New Home / First-Time Buyer Credit Publication for instructions on claiming the tax credit (the publication will be available by December, 2010).
• Special rules apply to married/RDP taxpayers filing separately, in which case each spouse/RDP is entitled to one-half of the tax credit, even if their ownership percentages are not equal. For 2 or more taxpayers who are not married/RDP, the tax credit amount will have already been allocated to each taxpayer occupying the residence on their respective tax credit allocation letter.
• If the available tax credit exceeds the current year net tax, the unused tax credit may not be carried over to the following tax year.
• The tax credit may not reduce regular tax below TMT.
• The tax credit is not refundable.
• Any disallowance of the tax credit may not be protested or appealed.

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