You Paid What for That House?

Oct. 9, 2007 — -- A troubled real estate market in Manteca, Calif., has forced a town to resort to gimmicks to sell homes, including big one-day sales, much like the ones at car dealerships or appliance stores.

Real estate is on the edge. Around the country there are communities of brand new luxury homes with no buyers. So the developers have now taken the drastic step of putting dozens of them up for auction at a huge discount. It's a great deal for new buyers, but troublesome news for the people who already live here.

"Within the last 13 months our neighborhood has depreciated tons and tons of thousands of dollars. I can't believe it," said Sherry Bergquist, a homeowner in Manteca, where developers will soon begin to employ this sales tactic.

The difference is dramatic. The people who moved to Manteca within the last year paid between a half-million dollars and $700,000 for their homes. As soon as the auction begins, a house that was listed for $578,000 will be available for $295,000.

"I paid 630. Right now my house is being offered at a minimum bid of 355," said homeowner Dave Cantrell said.

Randy Brown's dream backyard is now just a patch of dirt. He can't bear to spend any more money on the house.

"I paid $440,000 for this house," Brown said. Today, he could buy it for $285,000.

"For us when the buyers disappeared we were left with 63 homes that were under construction," said Craig Barton, chief financial officer for Anderson Homes, the company that's trying to sell the homes.

Barton said he understands the homeowners are angry.

"We're in the same situation they are. We pretty much bought this project at the top of the market, and we've ridden it down with them," he said.

But homeowners are at their wit's end.

"We can't sell. We can't refinance," Bergquist said.

Even as the homes sit empty on the verge of a controversial auction, construction continues and new homes continue to go up in the neighborhood.