Investors take advantage of low home prices

January 21, 2009 7:04:06 PM PST
Realtor Carl Mianecke is showing Evan Reis a three bedroom, one bathroom home which was foreclosed in Vallejo. Reis lives in Menlo Park, where he heads an earthquake engineering firm; he already owns his home and is now looking for rental property in Vallejo.

"It seemed like on every street there were multiple houses for sale," Reis said.

Almost 68 percent of last month's resold homes in Solano County were in foreclosure.

"The prices have come down to a point that people can afford to buy," Mianecke said.

The house Reis wants to buy is an example. Three years ago, the house could have sold for $380,000, Mianecke said, but the asking price now is just $85,000.

Last month, the median home price in Solano County was $213,500, compared to $370,000 a year ago, a 42 percent drop.

There are for sale signs all over Vallejo as well as empty homes, often a sign the home is in foreclosure.

Vallejo resident Eric Fischer cannot remember when he has seen so many sales in his neighborhood.

"I'd say in the last three months over, at least 10 homes, just on this street," Fischer said. He added many of the buyers are investors, just like Reis.

"The prices are going way down so they bought two houses for the normal price where they could only buy one a couple years ago, you know," Fischer said.

Realtors say a buyer with a decent credit score and reasonable income can get a loan to buy a home in Vallejo.