Wanna buy a house—cheap?

The small community of Manteca about 60 miles East of San Francisco is witnessing an economic disaster-in-the making, as the housing market is on the edge of collapse. Foreclosures have skyrocketed recently and hundreds of homes on the market have remained unsold and vacant for extended periods of time. Some homes are in a state of complete disrepair, and abandoned swimming pools have become breeding grounds for mosquitoes.

We lived in Manteca a few years ago. It was a beautiful small town, hardly touched by urban blight. The streets were lined with stately trees, its library was staffed with friendly employees, and its schools were neat and clean. It could have been described then as a classic small town community, a wonderful place to raise kids.

Now, an over-extended mortgage market has reached this ideal Northern California haven from the traffic and congestion of the Bay Area. As buyers default on excessive payments, mortgage holders are left holding the bag. Even public auctions are poorly attended, meaning the holders will either have to lower the minimum bid floor or let the properties fall into further disrepair, stretching civic resources such as police who must now increasingly patrol deteriorating neighborhoods.

Manteca’s population was around 63,000 in 2006. That’s up from 49,000 in 2000. The current population may sound substantial, but in context, it’s about within the population range of other Valley communities. Nearby Tracy, for example, is 57,000. The most populous nearby city is Modesto at 189,000.

Contrast those figures with some popular Bay Area communities: Napa 73,000; Santa Rosa 148,000; and San Mateo 92,000. A number of smaller towns ring the Bay Area, but many in the East Bay are packed together so tightly that a newcomer might believe all are one city.

Along with Manteca’s population increase came rising home values. In 2005 the median household/condo value was $416, 000 compared to $156, 000 in 2000. Now the air seems to be escaping from the balloon.

Still, if you are tired of an urban environment and can tolerate a 60-mile commute twice a day, you might like to check out Manteca. Two things to watch out for. It’s deathly hot in the summer and plagued on some days in the winter with a fog as thick, damp, and cold as an icy cloud from outer space.

On balance, though, it’s a pleasant location for a growing young family with kids. For a good deal more information, click here.

p.s. I wrote this at the beginning of the mortgage collapse but never got around to posting it. Now seems like a good time.