Money and Main Street

The Bust is a Boon

From California to D.C., falling home prices and cheaper mortgage rates are making dream homes possible.

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Madera, Calif.
Madera, CA
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Purchase price: $155,000
Price change from peak: -48%


Despite getting laid off from his banking job on Christmas Eve, Armando Avila has retained his optimism. The long-time loan officer believes his job skills and experience will be much in demand as steeply falling prices fuel a big upturn in the number of homes sold in California's Central Valley, where he and his wife live.

"It's going to be a good time to be a loan officer," he said.

Christmas week was quite a time for the Avila family. First, Armando was laid off on Wednesday - and a Merry Christmas to you. Then, he and wife, Elizabeth, closed on the house on Friday.

The property is in Madera, a mid-sized city near Fresno, where the housing market has been on a rollercoaster ride. But the plummeting prices gave Armando and Elizabeth, an administrative assistant with a contracting company, a great buying opportunity.

The house was a bank repossession of more than 1,800 square feet with four bedrooms, two baths and two living rooms on a nearly quarter-acre lot. They paid just $155,000 for a house that last sold for $364,000. That's not unusual in Madera. Prices are half what they were at the top of the market and have dropped 30% through the first three quarters of the year, according to Zillow.com.

"It's really a good time to buy here," said Armando. "You're able to get a good house in the good side of town for an affordable price."

A big component of their bargain buy was that they were able to get a great rate on their mortgage - just 5.625% on a 30-year fixed rate. That pegged their monthly payment to just over $700.

"We're only paying $38 more a month than out current rent," Armando said. - L.C.
NEXT: Castle Rock, Colo.
Last updated June 15 2009: 10:24 AM ET
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