Unwelcome Competition for Merced County Home Buyers

September 11, 2009 9:45:50 PM PDT
Many Merced County residents who are trying to buy homes while the prices are right are running into some unwelcome competition.Tammy Byus and her family are ready to move out of the Atwater home they've been renting for the past two years. But after months of searching and making offers, they still haven't been able to buy a new house. Byus said, "We'll look at one and there's 25 offers right off the bat, it's just insane!" Realtors in Merced County say that's happening to more and more clients now because both local and out of town investors are paying cash to snatch up bargain priced homes for rental properties.

Merced County Realtor Andy Krotik said, "The investors are coming in from the Bay Area, they're coming in from out of town. Houses are selling faster and average about 18% over list price in a quicker amount of time than I've seen in 20 years in real estate."

And those rapid sales have left the area with a dwindling supply of homes for sale. The city of Merced alone has seen its average month's supply of inventory drop 71 percent in the last year. And local residents hoping to take advantage of federal and state assistance are having trouble competing for what's left.

Merced County Association of Realtors President Michelle Gabriault-Acosta said, "The problem right now is we're so low on inventory that if you put in an offer under a 100,000, you're competing against the cash buyers, and the bank will always take the cash over a contract."

Michelle Gabriault-Acosta says it's not uncommon for homes right now to receive dozens of bids well-above the asking price, but she adds that in some cases persistence does pay off.

"I worked with a young first time homebuyer just recently and it took us 11 months, but she finally got into a house," said Gabriault-Acosta.

Some realtors predict more houses will hit the market soon if banks release another wave of foreclosures. And with prices still a fraction of what they were when Tammy first considered buying two years ago, she says it's been worth the wait.

"Oh yeah, definitely, its way worth it to try to buy a home now if you can get in there," said Byus.

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