The supply of houses on the market in Merced County is down nearly 70-percent compared to this time last year. Local realtors say there are plenty of vacant homes in the area, but they're not up for sale.
If you're looking to buy a home in Merced County you may have to look a little harder these days.
Andy Krotik said, "This is the fewest amount of homes for sale in the 23 years I've been in the business."
Realtor Andy Krotik says banks are doing more loan modifications and short sales, and taking a long time to release foreclosures. He says about 500 homes are vacant in the city of Merced alone, but most of them are not for sale. "Why they're holding onto these homes it is only speculating, it could be because they want the prices to rebound we just don't know."
Krotik says that's led home prices in the area to increase 10-percent since January. And most are selling for 15 to 18-percent above asking price. That's good news for sellers, but challenging for buyers. "It's just frustrating for especially these first time homebuyers who don't understand the process and can't understand why they have to pay more than the list price to get the house."
Ana Gallegos is an exception to that trend. She's just days away from closing on a home she loves in Atwater and did not have to get in a bidding war. Gallegos says patience is the key. "Look around, you just have to look around, drive around see what you like, take your time."
But Krotik says out of town investors are also making it more challenging for local residents to buy homes. And he doesn't see this trend changing any time soon.
Andy Krotik says another problem he's seeing is that homes are selling for above the appraised value, and in most cases you can only get a loan for the amount of the appraisal. So buyers are being forced to pay the difference out of their own pockets.