Home buyers from San Jose know the way to Manteca.

Bay Area buyers armed with 30 to 40 percent down payments are snapping up new homes as lots become available and creating situations in the Manteca resale market where asking prices are often exceeded when it comes to newer houses with larger footprints that are loaded with upgrades and ready to move in.

The epicenter of the Manteca market is currently on South Main Street.

“It’s crazy out there,” said Mike Atherton of Atherton Homes. “Everything is selling as it becomes available. I’ve never seen anything like it.”

That is saying a lot given Atherton has been building in Manteca since 1987. Atherton and his partners rode the crest of the 1999 to 2005 housing wave that saw people standing in line to buy homes with prices going up $10,000 to $20,000 between the time contracts were signed and new homes completed.

While COVID-19 protocols have eliminated camping overnight to get in line for new releases the demand and sizeable down payments are two things that Atherton hasn’t seen before in Manteca. Coupled with historically low interest rates and Bay Area buyers armed with proceeds from older homes similar to ones selling for $400,000 currently in Manteca that they are selling for close to $1 million in San Jose,  buyers can purchase houses that reflect the lifestyle they want in Manteca.

The key is putting down upwards of 40 percent on a $700,000 new home that ends up reducing their monthly payments given they are only financing $420,000.

Raymus Homes is one of the builders in the 1,301-home Griffin Park where Atherton is also selling homes on South Main.

Toni Raymus has reported brisk sales as well along with many of the buyers putting 30 to 40 percent down.

New Manteca tract

home resale record

set at $1,220,000

Just a half of a mile from the frenzy building activity in Griffin Park, an existing home that closed escrow on Tuesday established a new Manteca tract home resale record.

Emad Basma of Berkshire Hathaway brokered a deal for $1,220,000 for a 4,199-square-foot home on Iris Place roughly two blocks south of Woodward Park that was built in 2004 for $496,500. The six bedroom, four bathroom home with a 3-car garage on a 0.24 acre lot was the second largest model Atherton Homes was building at the time.

Basma noted comparables in the area called for pricing the home in the $900,000 price range. But due to the extensive resort-like upgrades the original owners added in the backyard designed for entertaining, he listed it for $1,199,900.

The sellers ended up getting multiple offers including a back-up offer that came in $21,000 over the asking price. After an offer was accepted a potential buyer who made an offer at less than $1 million based on comparables submitted a back-up offer of $1,250,000 in the event the accepted offer failed to close escrow. The gambit didn’t work given the deal with a $1,220,000 price closed Tuesday.

“It’s crazy,” Basma said  of the South San Joaquin housing market.

The appeal of the property was what the original owners did with it.

 The backyard features a sweeping outdoor living area with a poolside outdoor kitchen and bar, a large swimming pool featuring  two waterfalls including a grotto. There is extensive finished textured concrete work accented with stone and tile. Numerous palm trees finish off the South Pacific feel. The portion of the backyard where there is a lawn and a Tahitian-style gazebo

Basma noted buyers who have sold their Bay Area homes are fueling the pricing surge given they often can buy the home they want on the South County resale market that already have desirable upgrades made and falls easily with their price range.

“It’s a great market (for local sellers and buyers from the Bay Area),” Basma noted.

Basma added it unfortunately isn’t that great for local buyers who often rely on paychecks earned at jobs on this side of the Altamont Pass.

Basma has been successful at securing offers on a number of his listings in Tracy, Mountain House, Manteca, and Lathrop that have been above the asking price.

He noted the region is essentially part of the Bay Area when it comes to house hunting. The resale market particularly allows Bay Area buyers to secure larger homes with more amenities compared to anything they were living in or could afford to purchase west of the Altamont Pass.

Housing lifestyle plus

effective tax rate put

Manteca on the map

Basma said in terms of buyers getting the most bang out of their dollars relatively newer resales in Manteca work to their advantage for two reasons. While prices tend to be get lower as you move farther east of the Altamont Pass, the larger Manteca homes built since 1999 have lower effective tax rates.

The add-ons to the basic tax rate are lower given the existence of less and/or lower cost Mello-Roos districts in place for schools and purposes such as landscape and park maintenance than in surrounding areas.

That often makes the effective tax rate in Manteca 1.22 percent as opposed to 1.7 to 1.9 percent in River Islands and sections of Tracy and other nearby cities.

Basma said most of his sellers are using their windfall to move out of state to areas that have a lower cost of living.

There are those that also cash in on significant equity that move elsewhere in California where housing costs are lower.

To contact Dennis Wyatt, email dwyatt@mantecabulletin.com