First-time buyers returning to Central California

One of the central tenets of buying real estate is that someone else's loss can be your gain, and that's exactly what's starting to happen in Central California. In the City of Fresno -- which, due to its own homegrown economy has actually performed a bit better through the housing downturn than other areas more reliant on the commuter market such as Stockton or Modesto -- first-time buyers armed with traditional down payments and decent credit scores are now re-entering the market to scoop up discounted foreclosures. So is this the first stage of a recovery in such areas? Too soon to tell, but certainly good news for those buyers who had the patience to wait. From the Fresno Bee:

First-time home buyers, shut out of the market when prices skyrocketed in the first half of this decade, are becoming the dominant force in an otherwise battered market.

The trend -- which has yet to show up in statistics -- represents a ray of hope to an industry hard hit by a subprime mortgage crisis that has lenders nationally writing off billions in losses and many central San Joaquin Valley neighborhoods dotted with empty houses.

Experts say falling prices and interest rates and an abundant supply are enticing would-be first-time home buyers off the sidelines.

Those who can meet higher lending standards are in a good position to benefit from the housing bust...

About 3,900 houses are available for sale in Fresno and Clovis, and, thanks to falling prices, the percentage of families in Fresno County that can afford an entry-priced house has climbed to 44% from 19% at the peak of the housing boom in 2006, according to the California Association of Realtors.

The median price of a house in Fresno County fell 16.7% over the last year, according to Zillow.com, to $226,776...

Real estate agents say investors also are back in the market, looking for houses to rent and, in some cases, flip. "I just sold a beautiful fixer-upper in University Portals for $160,000...

Financing and credit requirements have tightened up, but home buyers -- including those purchasing their first house -- are benefiting from the resurgence of the Federal Housing Administration, or FHA, loan...

Nationwide, the use of FHA loans is up 40% from last year, with many of those used to refinance adjustable-rate mortgages, said Jerrold Mayer, director of the program support division for the Department of Housing and Urban Development.

"I was doing zero FHA loans three months ago, and now they are 40% of my business," said Chris Wolfe of Wolfe Mortgage Group in Fresno. "It is the last remaining loan if you don't have perfect credit."

While first-time home buyers are jumping into the marketplace, loan officer Michael Gilmore believes many others are waiting for prices to fall even more.

"I'm still of the opinion that incredible pent-up demand is still sitting on the fence waiting for things to bottom out," said Gilmore, who operates The Mortgage Professionals in Fresno.

"Prices have fallen, interest rates have fallen and there is blood in the water," he said. "It could be worse before it gets better, but we're getting near the end of this cycle."